Rite Aid Corp

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RAD : NYSE : Services
$7.46 | %
Today's Range: 6.95 - 8.61
Avg. Daily Volume: 1.62294E7
01/20/17 - 4:07 PM ET

Financial Analysis


RITE AID CORP's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. RITE AID CORP has weak liquidity. Currently, the Quick Ratio is 0.63 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 29.01% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)8089.738154.18
EBITDA ($mil)256.98364.45
EBIT ($mil)113.73228.02
Net Income ($mil)15.0159.54


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)220.03226.25
Total Assets ($mil)11658.9311718.08
Total Debt ($mil)7274.917367.48
Equity ($mil)646.13500.83


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin25.1926.24
EBITDA Margin3.174.46
Operating Margin1.412.8
Sales Turnover2.792.5
Return on Assets0.7716.51
Return on Equity14.05386.33
Debt Q3 FY16 Q3 FY15
Current Ratio1.631.52
Debt/Capital0.920.94
Interest Expense106.31106.88
Interest Coverage1.072.13


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)1052.271046.47
Div / share0.00.0
EPS0.010.06
Book value / share0.610.48
Institutional Own % n/a n/a
Avg Daily Volume1.7731976E71.4992527E7

Valuation


HOLD. RITE AID CORP's P/E ratio indicates a significant premium compared to an average of 23.24 for the Food & Staples Retailing industry and a significant premium compared to the S&P 500 average of 25.49. For additional comparison, its price-to-book ratio of 14.17 indicates a significant premium versus the S&P 500 average of 2.84 and a significant premium versus the industry average of 3.78. The current price-to-sales ratio is well below the S&P 500 average and is also below the industry average, indicating a discount. After reviewing these and other key valuation criteria, RITE AID CORP proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
RAD 108.75 Peers 23.24   RAD 18.54 Peers 9.29

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

RAD is trading at a significant premium to its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

RAD is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
RAD 38.84 Peers 18.78   RAD NM Peers 2.09

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

RAD is trading at a significant premium to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

RAD's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
RAD 14.17 Peers 3.78   RAD -95.77 Peers 0.18

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

RAD is trading at a significant premium to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, RAD is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
RAD 0.28 Peers 0.54   RAD 11.11 Peers 1.37

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

RAD is trading at a significant discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

RAD has a sales growth rate that significantly exceeds its peers.

 

 

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