NEW YORK (TheStreet) -- Fresh Market
(TFM - Get Report) shares were downgraded to "underperform" from "neutral" by analysts at Stern Agee on Wednesday.
Company shares are down -6.5% to $33.50 in pre-market trading.
Must Read: Warren Buffett's 10 Favorite Growth Stocks
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
The firm set the company's price target to $29, suggesting a 19% drop from the stock's closing price on Tuesday.
Analysts praised the company for extending store hours in an attempt to improve same-store sales, but also noted the move suggests stiff competition from rivals Whole Foods (WFM - Get Report) and Sprouts (SFM - Get Report).
Separately, TheStreet Ratings team rates FRESH MARKET INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate FRESH MARKET INC (TFM) 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, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and premium valuation."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 6.3%. Since the same quarter one year prior, revenues rose by 15.1%. 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 130.55% to $35.75 million when compared to the same quarter last year. In addition, FRESH MARKET INC has also vastly surpassed the industry average cash flow growth rate of -7.19%.
- TFM's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.22 is very weak and demonstrates a lack of ability to pay short-term obligations.
- The gross profit margin for FRESH MARKET INC is currently lower than what is desirable, coming in at 33.51%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.46% trails that of the industry average.
- You can view the full analysis from the report here: TFM Ratings Report