Editor's Note: 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.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B+ . The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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Highlights from the ratings report include:
- KSS's revenue growth has slightly outpaced the industry average of 2.3%. Since the same quarter one year prior, revenues slightly increased by 2.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- KOHL'S CORP has improved earnings per share by 13.8% 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, KOHL'S CORP increased its bottom line by earning $4.38 versus $3.69 in the prior year. This year, the market expects an improvement in earnings ($4.58 versus $4.38).
- 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 Multiline Retail industry average. The net income increased by 1.9% when compared to the same quarter one year prior, going from $211.00 million to $215.00 million.
- The debt-to-equity ratio is somewhat low, currently at 0.75, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.15 is very weak and demonstrates a lack of ability to pay short-term obligations.
- 38.10% is the gross profit margin for KOHL'S CORP which we consider to be strong. Regardless of KSS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, KSS's net profit margin of 4.80% compares favorably to the industry average.
Kohl's Corporation operates department stores in the United States. Its stores offer private, exclusive, and national branded apparel, footwear, and accessories for women, men, and children; soft home products, such as sheets and pillows; and housewares targeted to middle-income customers. Kohl's has a market cap of $12 billion and is part of the services sector and retail industry. The company has a P/E ratio of 12, below the S&P 500 P/E ratio of 17.7. Shares are up 3.7% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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