NEW YORK ( TheStreet) -- 1-800 Flowers.com (Nasdaq: FLWS) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the company has not been very careful in the management of its balance sheet. Highlights from the ratings report include:
- Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 66.25% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- 1-800-FLOWERS.COM 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, 1-800-FLOWERS.COM turned its bottom line around by earning $0.09 versus -$0.03 in the prior year. This year, the market expects an improvement in earnings ($0.15 versus $0.09).
- Net operating cash flow has increased to $18.96 million or 39.87% when compared to the same quarter last year. Despite an increase in cash flow, 1-800-FLOWERS.COM's average is still marginally south of the industry average growth rate of 47.66%.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Internet & Catalog Retail industry and the overall market, 1-800-FLOWERS.COM's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- Despite currently having a low debt-to-equity ratio of 0.32, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.44 is very low and demonstrates very weak liquidity.