NEW YORK (
) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 26.63%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 281.25% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 265.9% when compared to the same quarter one year ago, falling from $21.10 million to -$35.00 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Specialty Retail industry and the overall market, COLLECTIVE BRANDS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for COLLECTIVE BRANDS INC is currently lower than what is desirable, coming in at 34.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.00% is significantly below that of the industry average.
- Net operating cash flow has decreased to $18.50 million or 23.86% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Collective Brands, Inc. primarily engages in the wholesale and retail of footwear and related accessories worldwide. The company has a P/E ratio of 7.5, equal to the average retail industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Collective has a market cap of $616.8 million and is part of the
industry. Shares are down 51.3% year to date as of the close of trading on Thursday.
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