NEW YORK (TheStreet) -- Moneygram International (MGI - Get Report) shares are down -12.2% to $13.00 today following last week's announcement of Walmart's (WMT - Get Report) "Walmat-2-Walmart Money Transfer Service".
Previously, Moneygram was the fund transfer service used in Walmart stores.
However, with Walmart planning to offer the service themselves and cut out the middle man -- Walmart's price point is 25 cents and $2 cheaper than Monegrams current under-$50 and over-$200 pricing structure respectively-- Moneygram shares are taking a hit.
Walmart's service is set to go online April 24.
TheStreet Ratings team rates MONEYGRAM INTERNATIONAL INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate MONEYGRAM INTERNATIONAL INC (MGI) 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 revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the stock has experienced relatively poor performance when compared with the S&P 500 during the past year."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 20.2%. Since the same quarter one year prior, revenues slightly increased by 8.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- MONEYGRAM INTERNATIONAL INC has improved earnings per share by 17.9% 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. This trend suggests that the performance of the business is improving. During the past fiscal year, MONEYGRAM INTERNATIONAL INC turned its bottom line around by earning $0.73 versus -$0.70 in the prior year. This year, the market expects an improvement in earnings ($1.40 versus $0.73).
- The gross profit margin for MONEYGRAM INTERNATIONAL INC is rather high; currently it is at 61.02%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.06% trails the industry average.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
- You can view the full analysis from the report here: MGI Ratings Report