Ollie’s Bargain Outlet: Buy it While It’s Still a Bargain

Key Points

• Ollie's Bargain Outlet is well-positioned to continue accelerating its growth and driving value for its shareholders.
• The Q2 results and guidance align with a bullish analyst upgrade and revision cycle that is in place.
• Valuation metrics suggest this stock could rise by at least 100% over the next few years.

Ollie’s Bargain Outlet Holdings NASDAQ: OLLI is not a cheap stock, trading at approximately 40x its current year’s earnings forecast, but this market is pricing in growth. The growth pace forecasted by analysts places this stock in the low teens relative to its 2035 consensus, which is a deep value among high-quality retailers. The TJX Companies NYSE: TJX, the established off-price leader, trades at 30x its current-year earnings, suggesting Ollie’s isn’t all that overpriced in 2025, and the potential for share price gains is substantial.

Ollie’s stock price could advance by 100% or more within the next few years in this scenario, and the upside may be greater because of its performance in 2025. 

The 2025 results are strong, but the growth is accelerating sequentially and compared to the same period last year, outperforming consensus estimates. The development is underpinned by an accelerating store count, primarily due to Big Lots' bankruptcy. The bankruptcy left a void that Ollie’s is happy to fill and provided ample infrastructure for the company to capitalize on.

Ollie’s acquired over 60 Big Lots leases and rapidly converted them to Ollie’s formats. The takeaway is that the long-term forecasts for Ollie’s Bargain Outlet are likely low, and a bullish analyst revision cycle can be sustained. 

As of late August 2025, Ollie’s analyst trends are bullish. The coverage is steady at 13 analysts, sufficient for a reasonable conviction in the consensus data, with a Moderate Buy rating and an increasing price target.

The consensus price target assumes the market is trading near fair value at $132, but it has increased by 30% in the preceding 12 months and 5% in the 30 days leading up to the Q2 release, suggesting a 20% upside is possible at the high end of the range. A move to the high-end of $159 is significant because it would set a new all-time high. 

Ollie’s Bargain Outlet’s Q2 Results Give Cause for Analysts to Lift Estimates

Ollie’s Bargain Outlet had a robust quarter driven by improving comps and an accelerated store count growth. The company’s $679 million net revenue is up by 18.5% year-over-year, outperforming MarketBeat’s consensus estimate by more than 300 basis points, on a 5% comp store increase and a 16.8% increase in store count. 

The company says it has the “wind in its sails”, with sales driven by transactions, consumer staples, and seasonal items. Ollie’s Army is another area of strength, with loyalty membership up by more than 10%. 

Margin is another area of strength. Not only is the company converting the ghost footage acquired from Big Lots into an operating store count, but internal improvements in planning and a favorable merchandise environment also aid margin.

The gross margin improved by 200 basis points, the operating margin by 80 basis points, and the adjusted EPS by 25%, outperforming expectations.

The EPS is nearly 1000 bps ahead of schedule and expected to remain strong as the year progresses. 

The guidance was also strong and supports an outlook for an analyst upgrade cycle.

The company has raised its forecasts for revenue and earnings above the consensus estimates and is likely to outperform due to the prevailing trends.

The improving store count, comp store growth, and a favorable selling environment are triple tailwinds to drive revenue growth and a widening of margins. 

Ollie’s Bargain Outlet Pulls Back After Results

Ollie’s stock price surged following the Q2 release, but the gain was capped early, resulting in a gap at the open and a large red candle by the day’s end. The move suggests support for this market is present, but profit-takers and naysayers are capping gains.

The pullback could linger through September, resulting in a move to $125 or $120. However, critical support is near $130; if the market can sustain it, consolidation at the current level is likely, and a new high and continuation of the uptrend will quickly follow.