NEW YORK (TheStreet) -- Big five Sporting Goods Corporation (Nasdaq:BGFV) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth and attractive valuation levels. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share. Highlights from the ratings report include:
- BGFV's revenue growth has slightly outpaced the industry average of 5.6%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.46, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.09 is very low and demonstrates very weak liquidity.
- Looking at the price performance of BGFV's shares over the past 12 months, there is not much good news to report: the stock is down 36.73%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.
- BIG five SPORTING GOODS CORP's earnings per share declined by 12.9% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, BIG five SPORTING GOODS CORP reported lower earnings of $0.94 versus $1.01 in the prior year. For the next year, the market is expecting a contraction of 22.9% in earnings ($0.73 versus $0.94).
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