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 hold with a ratings score of C . The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and a generally disappointing performance in the stock itself.
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Highlights from the ratings report include:
- Net operating cash flow has increased to $109.92 million or 19.61% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -27.43%.
- SPLS, with its decline in revenue, underperformed when compared the industry average of 9.6%. Since the same quarter one year prior, revenues slightly dropped by 5.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The gross profit margin for STAPLES INC is currently lower than what is desirable, coming in at 27.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.20% trails that of the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 31.7% when compared to the same quarter one year ago, falling from $176.44 million to $120.43 million.
Staples, Inc., together with its subsidiaries, operates as an office products company. The company offers various office supplies and services, office machines and related products, computers and related products, and office furniture under Staples, Quill, and other proprietary brands. The company has a P/E ratio of 8.3, below the average specialty retail industry P/E ratio of 9.5 and below the S&P 500 P/E ratio of 17.7. Staples has a market cap of $9.19 billion and is part of the
industry. Shares are down 21.9% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.