HHGregg Incorporated Stock Downgraded (HGG)
NEW YORK (
)
(NYSE:
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 3.7%. Since the same quarter one year prior, revenues rose by 28.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Although HGG's debt-to-equity ratio of 0.12 is very low, it is currently higher than that of the industry average. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.20 is very weak and demonstrates a lack of ability to pay short-term obligations.
- The gross profit margin for HHGREGG INC is currently lower than what is desirable, coming in at 28.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.00% trails that of the industry average.
- Net operating cash flow has significantly decreased to $4.51 million or 70.22% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
hhgregg, Inc. operates as a specialty retailer of consumer electronics, home appliances, and related services. The company has a P/E ratio of 8.9, below the average retail industry P/E ratio of 9.6 and below the S&P 500 P/E ratio of 17.7. HHGregg has a market cap of $411.5 million and is part of the
sector and
industry. Shares are down 30.6% year to date as of the close of trading on Thursday.
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