NEW YORK (
-- Ruby Tuesday
) 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, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.8%. Since the same quarter one year prior, revenues slightly increased by 1.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.13 is very weak and demonstrates a lack of ability to pay short-term obligations.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 32.72%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 72.00% compared to the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.
- The gross profit margin for RUBY TUESDAY INC is rather low; currently it is at 17.60%. Regardless of RT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, RT's net profit margin of 1.40% is significantly lower than the same period one year prior.
Ruby Tuesday, Inc., together with its subsidiaries, develops, operates, and franchises casual dining restaurants in the United States, Puerto Rico, Guam, and internationally. The company has a P/E ratio of 24.1, equal to the average leisure industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Ruby Tuesday has a market cap of $460.6 million and is part of the
industry. Shares are up 4.6% year to date as of the close of trading on Tuesday.
You can view the full
or get investment ideas from our
-- Written by a member of TheStreet Ratings Staff