Select Comfort Corp

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SCSS : NASDAQ : Consumer Goods
$23.12 -2.00 | -8.00%
Today's Range: 22.93 - 23.81
Avg. Daily Volume: 546,000
09/28/16 - 1:57 PM ET

Financial Analysis


SELECT COMFORT CORP's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. SELECT COMFORT CORP has very weak liquidity. Currently, the Quick Ratio is 0.13 which clearly shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 31.94% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)276.88275.29
EBITDA ($mil)16.529.75
EBIT ($mil)2.418.63
Net Income ($mil)1.4211.04


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)2.488.45
Total Assets ($mil)454.74475.57
Total Debt ($mil)16.00.0
Equity ($mil)173.81255.39


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin66.9565.99
EBITDA Margin5.9610.8
Operating Margin0.876.77
Sales Turnover2.682.67
Return on Assets5.5117.31
Return on Equity14.4232.23
Debt Q2 FY16 Q2 FY15
Current Ratio0.721.21
Debt/Capital0.080.0
Interest Expense0.250.01
Interest Coverage9.551862.9


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)45.9351.41
Div / share0.00.0
EPS0.030.21
Book value / share3.784.97
Institutional Own % n/a n/a
Avg Daily Volume543993.0740086.0

Valuation


HOLD. SELECT COMFORT CORP's P/E ratio indicates a significant premium compared to an average of 21.96 for the Specialty Retail industry and a significant premium compared to the S&P 500 average of 25.19. To use another comparison, its price-to-book ratio of 6.82 indicates a significant premium versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 12.35. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
SCSS 51.62 Peers 21.96   SCSS 11.06 Peers 14.09

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

SCSS is trading at a significant premium to its peers.

 

Discount. 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.

SCSS is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
SCSS 15.18 Peers 19.56   SCSS 1.79 Peers 1.91

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

SCSS is trading at a valuation on par with its peers.

 

Average. 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.

SCSS trades at a valuation on par to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
SCSS 6.82 Peers 12.35   SCSS -67.54 Peers 0.78

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

SCSS is trading at a significant discount to its peers.

 

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

However, SCSS 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
SCSS 0.97 Peers 1.48   SCSS -4.11 Peers 7.28

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.

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

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

SCSS significantly trails its peers on the basis of sales growth

 

 

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