NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, compelling growth in net income, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- PBY's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 5.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Specialty Retail industry average. The net income increased by 22.6% when compared to the same quarter one year prior, going from $5.72 million to $7.01 million.
- Net operating cash flow has slightly increased to $33.82 million or 2.71% when compared to the same quarter last year. In addition, PEP BOYS-MANNY MOE & JACK has also modestly surpassed the industry average cash flow growth rate of -3.48%.
- PEP BOYS-MANNY MOE & JACK has improved earnings per share by 18.2% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, PEP BOYS-MANNY MOE & JACK increased its bottom line by earning $0.70 versus $0.45 in the prior year. This year, the market expects earnings to be in line with last year ($0.70 versus $0.70).
The Pep Boys Manny, Moe & Jack, together with its subsidiaries, provides automotive repair and maintenance services, tires, parts, and accessories. The company has a P/E ratio of 19.4, above the average retail industry P/E ratio of 14.9 and above the S&P 500 P/E ratio of 17.7. Pep Boys - Manny Moe & Jack has a market cap of $614.7 million and is part of the
industry. Shares are up 36.5% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet RatingsStaff