NEW YORK (
) -- Every trading day TheStreet Ratings' stock model reviews the investment ratings on around 4,700 U.S. traded stocks for potential upgrades or downgrades based on the latest available financial results and trading activity.
TheStreet Ratings released rating changes on 54 U.S. common stocks for week ending September 7, 2012. 30 stocks were upgraded and 24 stocks were downgraded by our stock model.
Rating Change #10
has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and weak operating cash flow.
Highlights from the ratings report include:
- GES's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GES has a quick ratio of 1.59, which demonstrates the ability of the company to cover short-term liquidity needs.
- 40.70% is the gross profit margin for GUESS INC which we consider to be strong. Regardless of GES's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.10% trails the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 29.3% when compared to the same quarter one year ago, falling from $60.66 million to $42.90 million.
- Net operating cash flow has significantly decreased to $8.00 million or 80.26% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Guess , Inc. designs, markets, distributes, and licenses lifestyle collections of contemporary apparel and accessories for men, women, and children that reflect the American lifestyle and European fashion sensibilities. The company has a P/E ratio of 11.1, above the average retail industry P/E ratio of 10.3 and below the S&P 500 P/E ratio of 17.7. Guess has a market cap of $2.34 billion and is part of the
industry. Shares are down 12% year to date as of the close of trading on Wednesday.
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