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, impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 6.1%. Since the same quarter one year prior, revenues rose by 11.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- VITAMIN SHOPPE INC reported significant earnings per share improvement 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 year. We feel that this trend should continue. During the past fiscal year, VITAMIN SHOPPE INC increased its bottom line by earning $1.03 versus $0.32 in the prior year. This year, the market expects an improvement in earnings ($1.59 versus $1.03).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 64.3% when compared to the same quarter one year prior, rising from $7.25 million to $11.91 million.
- Powered by its strong earnings growth of 60.00% and other important driving factors, this stock has surged by 40.05% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- Although VSI's debt-to-equity ratio of 0.06 is very low, it is currently higher than that of the industry average. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.31 is very weak and demonstrates a lack of ability to pay short-term obligations.
Vitamin Shoppe, Inc., through its subsidiaries, operates as a specialty retailer and direct marketer of nutritional products. The company has a P/E ratio of 26.7, below the average specialty retail industry P/E ratio of 31.7 and above the S&P 500 P/E ratio of 17.7. Vitamin Shoppe has a market cap of $1.2 billion and is part of the
industry. Shares are up 14.7% year to date as of the close of trading on Friday.
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