NEW YORK (TheStreet) -- Susser Holdings Corp (SUSS) has been downgraded to "market perform" from "outperform," Wells Fargo said Monday. The firm also cut estimates as the company is facing increased competition.
Separately, TheStreet Ratings team rates SUSSER HOLDINGS CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate SUSSER HOLDINGS CORP (SUSS) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 6.7%. Since the same quarter one year prior, revenues rose by 10.2%. 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.
- Net operating cash flow has significantly increased by 144.71% to $25.81 million when compared to the same quarter last year. In addition, SUSSER HOLDINGS CORP has also vastly surpassed the industry average cash flow growth rate of -9.62%.
- Compared to its closing price of one year ago, SUSS's share price has jumped by 37.48%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- SUSSER HOLDINGS CORP's earnings per share declined by 44.9% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SUSSER HOLDINGS CORP reported lower earnings of $0.65 versus $2.18 in the prior year. This year, the market expects an improvement in earnings ($2.36 versus $0.65).
- SUSS's debt-to-equity ratio of 0.90 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that SUSS's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.63 is low and demonstrates weak liquidity.
- You can view the full analysis from the report here: SUSS Ratings Report