NEW YORK (TheStreet) -- Shares of Michael Kors Holdings (KORS - Get Report) are down -3.09% to $86.06 after the Wall Street Journal's "Heard On The Street"column said the luxury retailer "should know better than to get too comfortable," when comparing it to the once high-flying competitor, Coach Inc. (COH).
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TheStreet Ratings team rates MICHAEL KORS HOLDINGS LTD as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate MICHAEL KORS HOLDINGS LTD (KORS) a BUY. This is driven by a number of strengths, 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- KORS's very impressive revenue growth greatly exceeded the industry average of 8.4%. Since the same quarter one year prior, revenues leaped by 53.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- KORS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.12, which clearly demonstrates the ability to cover short-term cash needs.
- Powered by its strong earnings growth of 56.00% and other important driving factors, this stock has surged by 38.95% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- MICHAEL KORS HOLDINGS LTD 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. During the past fiscal year, MICHAEL KORS HOLDINGS LTD increased its bottom line by earning $3.21 versus $1.97 in the prior year. This year, the market expects an improvement in earnings ($3.97 versus $3.21).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income increased by 59.3% when compared to the same quarter one year prior, rising from $101.10 million to $161.04 million.
- You can view the full analysis from the report here: KORS Ratings Report