Skip to main content

NEW YORK (TheStreet) -- Prices for Dick's Sporting Goods (DKS) - Get Dick's Sporting Goods, Inc. Report have been drifting lower all year, but selling accelerated in the past two months, culminating in what looks like an exhaustion gap -- after a seven-month decline, prices dropped sharply with a surge in volume and a price void, also known as a gap.

Image placeholder title

Prices have rebounded in recent days, nearly filling the entire gap. See chart above. We now have a bullish divergence between the lower lows in price and higher lows from the momentum study. DKS looks like it will need some rehabbing after the technical damage. A period of sideways price action would be a good beginning.

TheStreet Ratings team rates DICKS SPORTING GOODS INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

TheStreet Recommends

We rate DICKS SPORTING GOODS INC (DKS) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and unimpressive growth in net income.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • DKS's revenue growth has slightly outpaced the industry average of 4.2%. Since the same quarter one year prior, revenues slightly increased by 7.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • DKS's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.13 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income has decreased by 4.0% when compared to the same quarter one year ago, dropping from $49.21 million to $47.22 million.
  • Net operating cash flow has significantly decreased to -$87.17 million or 76.23% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: DKS

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.