NEW YORK (
-- Body Central
) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and weak operating cash flow.
Highlights from the ratings report include:
- BODY's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 40.56%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, BODY is still more expensive than most of the other companies in its industry.
- Net operating cash flow has decreased to $4.29 million or 49.73% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- 35.40% is the gross profit margin for BODY CENTRAL CORP which we consider to be strong. Regardless of BODY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BODY's net profit margin of 7.20% compares favorably to the industry average.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 9.7% when compared to the same quarter one year prior, going from $5.42 million to $5.94 million.
- BODY CENTRAL CORP has improved earnings per share by 5.9% 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, BODY CENTRAL CORP increased its bottom line by earning $1.23 versus $0.42 in the prior year. This year, the market expects an improvement in earnings ($1.35 versus $1.23).
Body Central Corp. operates as a specialty retailer of young women's apparel and accessories in the south, mid-Atlantic, and midwest regions of the United States. The company has a P/E ratio of 12.3, equal to the average retail industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Body Central has a market cap of $245.8 million and is part of the
industry. Shares are down 40.4% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet Ratings Staff
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.