NEW YORK ( TheStreet) -- Liz Claiborne (NYSE: LIZ) 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 largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall. Highlights from the ratings report include:
- Powered by its strong earnings growth of 1469.23% and other important driving factors, this stock has surged by 90.27% 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.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income increased by 860.2% when compared to the same quarter one year prior, rising from -$30.15 million to $229.19 million.
- LIZ, with its decline in revenue, underperformed when compared the industry average of 14.5%. Since the same quarter one year prior, revenues slightly dropped by 2.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- LIZ CLAIBORNE INC 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, LIZ CLAIBORNE INC turned its bottom line around by earning $0.99 versus -$1.07 in the prior year. For the next year, the market is expecting a contraction of 79.3% in earnings ($0.21 versus $0.99).
- Net operating cash flow has decreased to $126.52 million or 27.26% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
-- Written by a member of TheStreet RatingsStaff