Rating Change #4
Express Inc (EXP - Get Report) 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, growth in earnings per share, increase in net income, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- EXPR's revenue growth has slightly outpaced the industry average of 0.8%. Since the same quarter one year prior, revenues slightly increased by 8.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- EXPRESS INC has improved earnings per share by 23.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, EXPRESS INC increased its bottom line by earning $1.58 versus $1.45 in the prior year. This year, the market expects an improvement in earnings ($1.94 versus $1.58).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 24.8% when compared to the same quarter one year prior, going from $48.41 million to $60.39 million.
- 39.60% is the gross profit margin for EXPRESS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.00% is above that of the industry average.
- After a year of stock price fluctuations, the net result is that EXPR's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
Express, Inc. operates specialty retail stores in the United States. The company's stores offer apparel and accessories for women and men between 20 and 30 years old across various aspects of the lifestyles comprising work, casual, jeanswear, and going-out occasions. It also sells gift cards. The company has a P/E ratio of 15, equal to the average retail industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Express has a market cap of $2.12 billion and is part of the services sector and retail industry. Shares are up 18.9% year to date as of the close of trading on Tuesday.You can view the full Express Ratings Report or get investment ideas from our investment research center.