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 buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins.
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Highlights from the ratings report include:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- WAL-MART STORES INC has improved earnings per share by 11.3% 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 two years. We feel that this trend should continue. During the past fiscal year, WAL-MART STORES INC increased its bottom line by earning $4.55 versus $4.20 in the prior year. This year, the market expects an improvement in earnings ($4.92 versus $4.55).
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.1%. Since the same quarter one year prior, revenues slightly increased by 3.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Net operating cash flow has increased to $4,312.00 million or 34.49% when compared to the same quarter last year. In addition, WAL-MART STORES INC has also modestly surpassed the industry average cash flow growth rate of 30.02%.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Food & Staples Retailing industry average. The net income increased by 9.0% when compared to the same quarter one year prior, going from $3,336.00 million to $3,635.00 million.
Wal-Mart Stores, Inc. operates retail stores in various formats worldwide. It operates retail stores, restaurants, discount stores, supermarkets, supercenters, hypermarkets, warehouse clubs, apparel stores, Sam's Clubs, and neighborhood markets, as well as walmart.com; and samsclub.com. Wal-Mart Stores has a market cap of $232.76 billion and is part of the services sector and retail industry. The company has a P/E ratio of 14.3, below the S&P 500 P/E ratio of 17.7. Shares are up 1.4% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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