NEW YORK (TheStreet) -- Staples (SPLS) has acquired e-commerce software company Runa for an undisclosed amount, in a bet that the Silicon Valley-based company can help to personalize Staples' online shopping experience.
"Runa has a unique platform and outstanding talent with experience in ecommerce and online marketplaces," said Staples CEO Ronald Sargent in a statement. "We're adding technology to better serve our customers with personalized items, offers and delivery estimates."
On September 19, Staples opted out of Amazon (AMZN) Lockers, a program that allowed Amazon shoppers to collect online purchases in Staples stores.
Staples also recently launched Staples Connect, a device which links customers' home or office technology, allowing users to activate or deactivate lights, electronic doors and devices remotely through a control app.Staples shares jumped 2.1% to $15.11 as of 2:32 p.m. EST. The company is leading the S&P 500 which is down 0.48%. TheStreet Ratings team rates Staples as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate Staples (SPLS) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, SPLS's share price has jumped by 29.5%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that SPLS's debt-to-equity ratio is low, the quick ratio, which is currently 0.67, displays a potential problem in covering short-term cash needs.
- SPLS, with its decline in revenue, underperformed when compared the industry average of 19.7%. Since the same quarter one year prior, revenues slightly dropped by 2.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The gross profit margin for Staples is currently lower than what is desirable, coming in at 27.49%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.92% trails that of the industry average.
- Net operating cash flow has significantly decreased to -$0 million or 100% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: SPLS Ratings Report
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