NEW YORK (TheStreet) -- Conn's (CONN - Get Report) shares are climbing, up 6.7% to $49.74, on Monday following first quarter earnings results that were ahead of analysts consensus estimates.
The company reported a 31% year over year quarterly earnings increase to 81 cents per diluted share, beating Thomson Reuters estimates by 8 cents.
Revenue was up 33.6% to $335.5 million, beating estimates of $328.5 million, as same store sales rose 15% over the previous year.
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TheStreet Ratings team rates CONN'S INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CONN'S INC (CONN) 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 robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 44.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CONN'S INC reported significant earnings per share improvement 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, CONN'S INC increased its bottom line by earning $2.54 versus $1.55 in the prior year. This year, the market expects an improvement in earnings ($3.53 versus $2.54).
- CONN's debt-to-equity ratio of 0.91 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. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 4.10 is very high and demonstrates very strong liquidity.
- Net operating cash flow has significantly decreased to -$100.56 million or 168.80% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- In its most recent trading session, CONN has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- You can view the full analysis from the report here: CONN Ratings Report