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Director of Research, Traders Agency

With the RSI at a Record Low, Is It Time to Go Bargain Hunting on Burlington?

Author: Sam Quirke. Publication Date: 9/3/2026.

Any investor looking for a bargain might find a natural fit in Burlington Stores Inc. (NYSE: BURL), the off-price retailer whose entire appeal rests on selling brand-name goods for less. There’s a certain irony in the fact that its own shares have been selling off heavily in recent weeks and are currently down more than 30% from the all-time high they set in July.

The sell-off has pushed one of the stock’s technical momentum indicators to an extreme. Burlington’s relative strength index (RSI) has fallen to around 17, its lowest reading in several years. For context, the last time it was this oversold was during the COVID-era market crash. From those depths, the shares went on to rally a remarkable 230%.

That history raises a tantalizing question for investors. With sentiment this bleak and the stock this oversold, is Burlington suddenly the very kind of bargain its own shoppers are always hunting for?

To answer that, you have to understand what triggered the slump in the first place.

Why the Shares Slumped

Shares were already falling ahead of last week's earnings report, and the numbers did little to stem the bleeding. The results themselves were, in many respects, fine. The company beat analyst expectations for both revenue and earnings per share, but the trouble lay in the accompanying outlook, specifically what it implied for profits.

The truth is that the shares had probably run too hard, too fast. Having risen more than 30% in the space of a single month—a heady pace for a steady discount retailer—the stock was ripe for profit-taking, and that is exactly what began ahead of last week's report. The disappointing outlook then gave sellers a fresh reason to keep pushing the shares lower.

The core sticking point was guidance for the current quarter, with management expecting earnings per share to land between $1.60 and $1.70. That was not only below the $1.80 reported for the same quarter last year, but also well below the $2.03 consensus estimate. The company also expects pressure on margins from stubbornly high merchandise-sourcing costs. For a market that had been bidding the shares up to record highs, any hint of shrinking profitability was always going to sting.

The More Encouraging Reading

Yet dig a little deeper, and the picture is far less gloomy than the violent post-earnings price reaction suggests. Crucially, while the near-term guidance disappointed, Burlington actually raised its full-year forecast—hardly the act of a management team bracing for trouble.

The margin story, too, is more nuanced than it first appears. Much of the near-term pressure stems from a deliberate choice rather than a deterioration in the business. Burlington received a $55 million tariff refund, and rather than banking it as extra profit, management is reinvesting it in lower prices for shoppers. That sacrifices some short-term margin to strengthen the company’s value proposition and drive future sales.

That is a strategic decision, and it points to a confident retailer playing the longer game. For a business whose entire model depends on offering compelling value, spending to reinforce exactly that looks less like weakness and more like shrewd planning.

Could History Repeat?

So where does that leave the bargain hunters? This is where the technical setup becomes hard to ignore. An RSI near 17 marks the stock as deeply oversold, an extreme that can signal a selling low point rather than the start of a fresh leg lower. Given that the business raised its longer-term guidance, the current setup is difficult to dismiss from a pure risk-reward standpoint.

Indeed, investors need only look to Goldman Sachs, which recently reiterated its Buy rating on Burlington with a refreshed $382 price target, implying nearly 45% upside from current levels, to get a sense of the opportunity on offer.

The parallel with the COVID-era plunge only sharpens the point. The last time Burlington's RSI fell this low, the shares went on to rally more than 200% from their lows. History rarely repeats itself quite so neatly, but it does often rhyme.

Weighing Up the Opportunity

While the broader macroeconomic situations are entirely different, the ingredients that made the stock a bargain back then are largely present again: a fundamentally healthy retailer, sold off sharply on a near-term wobble, with its full-year guidance actually rising and sentiment about as bleak as it gets.

There is, of course, a chance that Burlington shares could fall further before turning higher, and the company’s performance will be scrutinized more closely than usual in the coming months. But for investors willing to look past a single quarter's cautious guidance, this looks like one of those rare moments when the discount retailer is trading at a serious discount itself.