It’s springtime in America and across the country, kids are heading to the ballfields, soccer games and lacrosse matchups. Their families may also be spending a lot of time on a sports app called GameChanger, which was acquired by Dick’s Sporting Goods in 2016 . The app can be used for live streaming games, as well as for following a team’s schedule, statistics and scorekeeping. While just a fraction of Dick’s business, GameChanger is “a key long term growth and margin driver,” Michael Baker, analyst at D.A. Davidson, wrote in an April 23 note. He has a buy rating on Dick’s and a $273 price target, suggesting nearly 41% upside from Friday’s close. “DKS stock has been among the hardest hit of our coverage growth in April due to potential tariff exposure in Asia,” Baker said. “But we would use the pull back as an opportunity to add to a high quality share gainer, with continued margin expansion opportunity.” DKS YTD mountain Dick’s Sporting Goods in 2025 He’s not the only one bullish on Dick’s. Fourteen out of 29 analysts rate it a buy or strong buy, and consensus price targets call for nearly 20% upside, per LSEG. Youth sports tailwind Baker thinks youth sports are a sizable and growing total addressable market. The latest figures on participation bode well for the business, he said. A recent report from the National Sporting Goods Association (NSGA) found that participation in nearly all youth team sports, ages 7 to 17, was up in 2024 compared to their three-year averages. Dick’s doesn’t break out the total size of its team sports business, but Baker thinks it is at least 30% of sales. Baseball is the largest part of the segment, making up half of team sports, he added. While baseball and softball participation rates moved slightly lower over the long term, there were favorable trends under the surface, Baker said. Youth baseball participation was up by about 20% in 2024, he said. Baker also adjusted NSGA’s softball data to focus only on females, and estimated that youth participation in 2024 was at its highest level in three years. In addition, participation rates of households with annual incomes of $100,000 or higher in baseball have been on an upward trend, said Baker, citing NSGA data. That is not only good news for GameChanger but across the retailer’s stores. “We think ‘frequent’ participants are more likely to spend on equipment,” Baker said. GameChanger surpassed $100 million in revenue in 2024, with about 9 million unique users active on the app, CEO Lauren Hobart said on the earnings conference call in March. There are different levels of fees, from free for basic features, to $39.99 a year for its plus plan and $99.99 for its premium plan, which includes highlight videos. GameChanger has had a compound annual growth rate of 40% since 2017, Hobart added. The company expects the app to reach roughly $150 million in revenue in 2025. There are more than 1 million teams, such as baseball, softball and football, on GameChanger. It oversees more than 7 million games a year, according to its website . Retail expert Jan Kniffen views gamechanger as a way for Dick’s, which is one of the fastest adopters of artificial intelligence, to optimize its customer base. However, he said it doesn’t have a big impact on earnings. “They’re monetizing their base,” said Kniffen, CEO of consulting firm J Rogers Kniffen World Wide Enterprises. “They know who they’ve got. They know what they want. They know what they’re interested in.” Kniffen calls Dick’s one of his top five retailers — and believes the prevalence of youth sports is bullish for the business. “When I was growing up, when people a lot younger than me were growing up, there were school sports and there were pickup games,” he said. “Now every sport has a select team, traveling teams, Pee Wee teams, school teams.” “The market’s there because we’ve never had more participation in youth sports,” he added. Plus, Dick’s has a higher-end consumer and they’re paying up for equipment, which gets replaced as kids grow and become better, he said. On top of that, the retailer has its House of Sport , an experiential twist on the sporting goods store — complete with features like rock-climbing walls, batting cages and golf simulators. “I’m a big fan, because I think the management figured it out right,” Kniffen said. “Nobody’s ever going to be like Dick’s, either, not in my lifetime.”
previous post