NEW YORK ( TheStreet) -- Big five Sporting Goods Corporation (Nasdaq: BGFV) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its attractive valuation levels, considering its current price compared to earnings, book value and other measures. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 1.4%. Since the same quarter one year prior, revenues slightly dropped by 0.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- BIG five SPORTING GOODS CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, BIG five SPORTING GOODS CORP reported lower earnings of $0.54 versus $0.94 in the prior year. This year, the market expects an improvement in earnings ($0.63 versus $0.54).
- The gross profit margin for BIG five SPORTING GOODS CORP is currently lower than what is desirable, coming in at 31.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.00% trails that of the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 31.96%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 100.00% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
-- Written by a member of TheStreet Ratings Staff