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TheStreet Open House

Why Staples (SPLS) Stock Is Up Today

NEW YORK (TheStreet) -- Staples (SPLS) was gaining 3% to $12.19 Monday following the announcement of a partnership with 3D Systems (DDD) to bring 3D printers to some stores.

The partnership will bring 3D printing services to two stores in New York City and Los Angeles as part of a pilot program. The stores will have a 3D printing center where customers can create their own 3D objects, or bring in their 3D printer-ready files to have them printed.

The stores will have trained employees who can teach customers about 3D printing and guide them through the process. Each store will also have a 3DMe Photobooth that will capture a person's face to create personalize figurines.

"3D printing offers enormous potential for small businesses, and by using Staples, they can print with the technology without having to invest in it," Staples senior vice president of business services Damien Leigh said in a statement.

Must read: Warren Buffett's 10 Favorite Growth Stocks

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TheStreet Ratings team rates STAPLES INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate STAPLES INC (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 compelling growth in net income, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 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 172.1% when compared to the same quarter one year prior, rising from $78.06 million to $212.38 million.
  • SPLS's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that SPLS's debt-to-equity ratio is low, the quick ratio, which is currently 0.69, displays a potential problem in covering short-term cash needs.
  • The gross profit margin for STAPLES INC is currently lower than what is desirable, coming in at 27.39%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.61% trails that of the industry average.
  • Net operating cash flow has decreased to $233.15 million or 28.13% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • You can view the full analysis from the report here: SPLS Ratings Report

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