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Barnes & Noble Inc
BKS : NYSE : Services
$8.26 | %
Today's Range: 8.15 - 8.59
Avg. Daily Volume: 1,639,700
02/05/16 - 4:02 PM ET

Financial Analysis


BARNES & NOBLE INC's gross profit margin for the second quarter of its fiscal year 2015 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. BARNES & NOBLE INC has very weak liquidity. Currently, the Quick Ratio is 0.07 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity decreased from the same period a year ago, despite already having very weak liquidity to begin with. This would indicate deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 29.27% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q2 FY15 Q2 FY14
Net Sales ($mil)894.65936.54
EBITDA ($mil)-9.99-12.18
EBIT ($mil)-45.05-49.14
Net Income ($mil)-39.2312.3


Balance Sheet Q2 FY15 Q2 FY14
Cash & Equiv. ($mil)13.37284.79
Total Assets ($mil)2447.733835.75
Total Debt ($mil)192.064.0
Equity ($mil)582.43823.49


Profitability Q2 FY15 Q2 FY14
Gross Profit Margin30.1630.51
EBITDA Margin-1.11-1.3
Operating Margin-5.04-5.25
Sales Turnover2.051.37
Return on Assets-0.870.27
Return on Equity-0.950.42
Debt Q2 FY15 Q2 FY14
Current Ratio1.141.18
Debt/Capital0.250.07
Interest Expense2.345.29
Interest Coverage-19.27-9.29


Share Data Q2 FY15 Q2 FY14
Shares outstanding (mil)75.6359.44
Div / share0.30.0
EPS-0.36-0.16
Book value / share7.713.85
Institutional Own % n/a n/a
Avg Daily Volume1618761.01341605.0

Valuation


HOLD. This stock’s P/E ratio is negative, making its value useless in the assessment of premium or discount valuation, only displaying that the company has negative earnings per share. To use another comparison, its price-to-book ratio of 1.08 indicates a discount versus the S&P 500 average of 2.51 and a significant discount versus the industry average of 10.56. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. After reviewing these and other key valuation criteria, BARNES & NOBLE INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
BKS NM Peers 23.57   BKS NM Peers 15.04

Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings.

BKS's P/E is negative making this valuation measure meaningless.

 

Neutral. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

BKS's P/CF is negative making the measure meaningless.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
BKS 14.52 Peers 20.11   BKS NA Peers 2.07

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

BKS is trading at a significant premium to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

Ratio not available.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
BKS 1.08 Peers 10.56   BKS -14.28 Peers 23.39

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

BKS is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, BKS is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
BKS 0.13 Peers 1.52   BKS -4.68 Peers 5.81

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

BKS is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

BKS significantly trails its peers on the basis of sales growth

 

 

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