Hibbett Sports, Inc. (HIBB) shares rose more than 1.5% during Wednesday's session after Susquehanna upgraded the stock to Positive with a price target of $25.00 per share. Analyst Sam Poser believes that the company's best-in-class digital and omni-channel capabilities have improved customer engagement, retention, and acquisition.
In addition, Hibbett's off-mall and rural store fleet provides a distinct advantage over the competition. While COVID-19 has adversely affected the industry, Poser believes that the company has ample liquidity and financial wherewithal to weather the challenging environment after ending its fiscal first quarter at $106.2 million in cash with a cash burn rate of $10 million.
The move comes shortly after Hibbett Sports reported mixed first quarter financial results. Revenue fell 21.4% to $269.84 million, beating consensus estimates by $58.39 million, but non-GAAP earnings came in at 31 cents per share, missing consensus estimates by 12 cents per share. Comparable store sales fell 19.5% during the first quarter due to a large number of closed stores, but e-commerce sales grew more than 110% and digital traffic rose 80% year over year.
From a technical standpoint, the stock retested the 200-day moving average at $20.53 after yesterday's earnings move. The relative strength index (RSI) is hovering near overbought conditions at 67.45, but the moving average convergence divergence (MACD) continued its trend higher. These indicators suggest that the stock could experience some consolidation before moving higher over the coming sessions.
Traders should watch for a breakout from the 200-day moving average toward prior highs of around $31.00 over the intermediate term. If the stock fails to break out, traders could see some consolidation between upper trendline resistance and lower trendline support at $18.50. The intermediate-term trend remains bullish, but there could be some consolidation in the short term.
The author holds no position in the stock(s) mentioned except through passively managed index funds.