NEW YORK (TheStreet) -- Shares of Rite Aid Corp. (RAD) - Get Rite Aid Corporation Report are up 1.2% to $5.05 after the company reported strong same store sales for the month of September.

The drugstore chain reported late Thursday that same store sales increased 5.1%, front-end same store sales by 2.3%, pharmacy same store sales by 6.3%, and prescription count at comparable stores by 4.1%, all compared to the prior-year period.

In addition, total drugstore sales for the four-week period increased 4.5% to $2.022 billion, compared to $1.935 billion for the same period last year. Prescription sales accounted for 69.5% of drugstore sales, and third party prescription sales represented 97.6% of pharmacy sales.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Recommends

TheStreet Ratings team rates RITE AID CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate RITE AID CORP (RAD) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including relatively poor performance when compared with the S&P 500 during the past year and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • RAD's revenue growth has slightly outpaced the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 3.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • RITE AID CORP 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, RITE AID CORP increased its bottom line by earning $0.22 versus $0.12 in the prior year. This year, the market expects an improvement in earnings ($0.28 versus $0.22).
  • The gross profit margin for RITE AID CORP is currently lower than what is desirable, coming in at 30.60%. Regardless of RAD's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.96% trails the industry average.
  • In its most recent trading session, RAD has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • You can view the full analysis from the report here: RAD Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.