Trade-Ideas LLC identified

Mattress Firm

(

MFRM

) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Mattress Firm as such a stock due to the following factors:

  • MFRM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.8 million.
  • MFRM traded 40,791 shares today in the pre-market hours as of 7:51 AM, representing 11.9% of its average daily volume.

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More details on MFRM:

Mattress Firm Holding Corp., through its subsidiaries, operates as a specialty retailer of mattresses, and related products and accessories in the United States. It operates in two segments, Retail Operations and Franchise Operations. The company also operates an e-commerce Website. MFRM has a PE ratio of 6. Currently there is 1 analyst that rates Mattress Firm a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Mattress Firm has been 395,600 shares per day over the past 30 days. Mattress Firm has a market cap of $1.1 billion and is part of the services sector and specialty retail industry. The stock has a beta of 0.88 and a short float of 41.7% with 19.92 days to cover. Shares are down 33.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Mattress Firm as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:

  • 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 2275.3% when compared to the same quarter one year ago, falling from $5.48 million to -$119.16 million.
  • The debt-to-equity ratio is very high at 3.20 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.16, which clearly demonstrates the inability to cover short-term cash needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Specialty Retail industry and the overall market, MATTRESS FIRM HOLDING CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for MATTRESS FIRM HOLDING CORP is currently lower than what is desirable, coming in at 34.22%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -14.17% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$3.61 million or 112.12% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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