Why Is Sportsman's Warehouse (SPWH) Stock Rocketing Higher Today

Adam Hejl /
2024/06/03 3:16 pm EDT

What Happened:

Shares of outdoor specialty retailer Sportsman's Warehouse (NASDAQ:SPWH) jumped 14.3% in the afternoon session after Roth Capital Partners analyst Matt Koranda initiated coverage on the stock and assigned a Buy rating with a $5 price target. The price target implied a potential 15% upside from where shares traded when the coverage was initiated. The analyst called out SPWH's "attractive position in the large shooting sports market" and believes the company is "turning the corner on cyclical headwinds and balance sheet erosion that have weighed on the stock."

Is now the time to buy Sportsman's Warehouse? Access our full analysis report here, it's free.

What is the market telling us:

Sportsman's Warehouse's shares are a little volatile and over the last year have had 40 moves greater than 5%. 

The biggest move we wrote about over the last year was 2 months ago, when the stock gained 22.8% on the news that the company reported fourth-quarter results, which blew past analysts' EPS expectations. The company also reduced its excess inventory and outperformed Wall Street's free cash flow estimates. 

On the other hand, its revenue missed as same-store sales decreased 12.8% (vs an estimated 8% decrease). That decline was slightly offset by 15 new store openings. 

Looking ahead, Sportsman's Warehouse expects its demand to remain troubled in 2024, but its forecasted EBITDA profitability was better than expected. Overall, this quarter's results still seemed fairly positive, and shareholders should feel optimistic.

Sportsman's Warehouse is down 3.3% since the beginning of the year, and at $4.32 per share it is trading 31.5% below its 52-week high of $6.30 from August 2023. Investors who bought $1,000 worth of Sportsman's Warehouse's shares 5 years ago would now be looking at an investment worth $1,169.

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