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Bear of the Day: Hibbett Sports (HIBB)

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It hasn’t been a great time to be in the sports retailing market. Several companies in this business have gone bankrupt in the past few years and the growth outlook for the survivors, by and large, isn’t fantastic.

A great example of this trend is Hibbett Sports ((HIBB - Free Report) ), a company that is expected to see EPS contract by a double-digit percentage level this year, and a whopping 45% this quarter when compared to the year ago period. Clearly, things aren’t expected to turnaround any time soon for Hibbett in terms of earnings, but what do analysts covering the stock think about their near-term prospects for a turnaround?

HIBB in Focus

Those covering the stock have been in universal agreement that the prospects for HIBB on the earnings front are getting worse. In just the past two months, the current quarter earnings consensus estimate has seen a reduction from 23 cents a share down to 16 cents per share, including eight cuts compared to zero increases.

We have seen a similar trend in the full year time frame too, including nine estimate cuts in the past month alone. This has actually brought the consensus estimate down from $2.74/share to $2.41/share, a decline of more than 12%.

With these kinds of figures, we shouldn’t be surprised to note that HIBB has earned itself a Zacks Rank #5 (Strong Sell), and that we are looking for the underperformance run to continue. And if that wasn’t enough, the stock also has a ‘D’ grade for a VGM Score including an ‘F’ for Growth. A negative projected EPS growth and a negative current cash flow growth will do that to a stock, especially when the industry has positive overall numbers for both of these metrics.

Overall, there just isn’t a whole lot to like about Hibbett Sports stock right now.

Other Choices

Clearly, investors may want to consider looking elsewhere besides HIBB for their exposure. However, the retail segment overall isn’t too promising with its sluggish sector rank. However, the ‘miscellaneous’ retail market (where HIBB finds itself) actually has a decent rank, suggesting there are several quality choices available to investors.

In particular, Big 5 Sporting Goods ((BGFV - Free Report) ) stands out as a strong alternative to HIBB, and could be better positioned in the tough sporting goods market. That is because Big 5 has a Zacks Rank #1 (Strong Buy) and a VGM Score of ‘A’ as well. Both of these figures put Hibbett Sports to shame and suggest that the road ahead for investors might be a lot smoother with Big 5 instead of Hibbett in the near term.


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