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NEW YORK (TheStreet) -- Rite Aid (RAD) - Get Free Report shares are up 2.8% to $7.35 in trading on Tuesday as the national retail drugstore chain benefits from rival Walgreen's (WAG) better than expected first quarter earnings results.

Rite Aid received a bump from its own earnings results yesterday following its earnings conference call. The company reported a 5.4% increase in same store sales during the third quarter that was fueled by a 4.5% increase in same store prescription count.

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Deerfield, IL-based Walgreen beat analysts' first quarter earnings expectations, citing strong prescription sales as the reason for the beat.

The company reported first quarter earnings of 81 cents per diluted share, six cents better than the 75 cents per share analysts were expecting for the period. Walgreen also reported a 6.8% rise in revenue to $19.55 billion which came out just ahead of analysts' $19.50 billion expectations.

TheStreet Ratings team rates RITE AID CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate RITE AID CORP (RAD) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • RAD's revenue growth has slightly outpaced the industry average of 1.2%. Since the same quarter one year prior, revenues slightly increased by 5.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • The gross profit margin for RITE AID CORP is currently lower than what is desirable, coming in at 30.30%. Regardless of RAD's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.56% trails the industry average.
  • Net operating cash flow has significantly decreased to $111.73 million or 54.21% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: RAD Ratings Report

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