Sportsman's Warehouse Stock Sees 3.1% Jump Amid Bullish Earnings Season

Sportsman's Warehouse (SPWH) shares jumped 3.1% after a strong start to the earnings season, with more than 85% of S&P 500 stocks exceeding expectations. The company's shares are volatile and have had 79 moves greater than 5% over the last year. Sportsman's Warehouse is up 38.7% since the beginning of the year but is trading 14.3% below its 52-week high. Investors who bought $1,000 worth of shares 5 years ago would now be looking at an investment worth $217.25.

Title: Sportsman's Warehouse (SPWH) Stock Surges Amid Positive Earnings and Analyst Upside

Sportsman's Warehouse (SPWH) shares experienced a significant 3.1% jump following the release of its earnings report, marking a strong start to the earnings season. This upward movement comes on the heels of more than 85% of S&P 500 stocks exceeding expectations. The company's stock has been volatile, with 79 moves greater than 5% over the past year. Since the beginning of the year, SPWH has seen an impressive 38.7% gain, yet it remains 14.3% below its 52-week high. Investors who purchased $1,000 worth of shares five years ago would now be looking at an investment worth $217.25.

The positive sentiment is driven by several factors. Analysts at Roth Capital have increased their price target for SPWH from $3 to $4.25, maintaining a "Buy" rating on the stock. This decision is based on sustainable positive trends in comparable sales, supported by various factors including the company's fiscal year 2025 guidance [1]. Additionally, the analyst highlighted that tariffs are expected to have minimal effect on SPWH's performance this year.

The average one-year price target for SPWH, as provided by 5 analysts, is $3.45, with a high estimate of $4.25 and a low estimate of $3.00. The consensus recommendation from 5 brokerage firms is currently 2.2, indicating an "Outperform" status [1]. GuruFocus estimates the GF Value for SPWH in one year to be $3.90, suggesting an upside of 12.07% from the current price of $3.48 [1].

Key business developments for SPWH include a 2% increase in net sales for Q1 2025, marking the first positive year-over-year sales comp in nearly four years. The company's e-commerce business posted an 8% increase over last year, driven by a new digital-first marketing strategy and improved omnichannel customer experience. Firearms unit sales increased nearly 7% over last year, significantly outpacing the adjusted NICS data, indicating market share gains. Positive sales comps were achieved in most core categories, including firearms, clothing and footwear, ammunition, and especially fishing, which was up 11% [1].

However, despite the positive sales growth, SPWH reported a net loss of $21.3 million for Q1 2025, compared to a net loss of $18.1 million in the prior year. Gross margin was slightly pressured by increased freight expenses tied to strategic inventory pull forward in anticipation of higher tariffs. SG&A expenses remained high at $95.3 million, representing 38.2% of net sales, though slightly improved from the prior year. The company pulled forward approximately $20 million in inventory to mitigate tariff impacts, temporarily elevating inventory levels. Camping sales were down, attributed to a later spring and the timing of Easter, impacting overall category performance [1].

In the broader context, the stock market has been on a positive trajectory, with the Nasdaq Composite and S&P 500 reaching new records as investors await earnings from tech heavyweights and clarity on US trade policy. This week sees investor focus dominated by two topics: Clarity on US trade policy as the implementation of tariffs looms, and earnings from tech heavyweights as Wall Street eyes record-high market valuations [2].

References:
[1] https://www.gurufocus.com/news/2980886/roth-capital-increases-price-target-for-spwh-to-425-spwh-stock-news
[2] https://finance.yahoo.com/news/live/stock-market-today-dow-jumps-sp-500-and-nasdaq-pace-toward-records-to-start-big-tech-dominated-earnings-week-173647340.html