NEW YORK ( TheStreet) -- Vera Bradley (Nasdaq: VRA) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself. Highlights from the ratings report include:
- VRA's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 39.12%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, VRA is still more expensive than most of the other companies in its industry.
- The gross profit margin for VERA BRADLEY INC is rather high; currently it is at 58.20%. Regardless of VRA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VRA's net profit margin of 14.90% compares favorably to the industry average.
- Although VRA's debt-to-equity ratio of 0.20 is very low, it is currently higher than that of the industry average. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.72 is somewhat weak and could be cause for future problems.
- Net operating cash flow has significantly increased by 101.24% to $44.65 million when compared to the same quarter last year. In addition, VERA BRADLEY INC has also vastly surpassed the industry average cash flow growth rate of 40.62%.
- VERA BRADLEY INC has improved earnings per share by 42.9% 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, VERA BRADLEY INC increased its bottom line by earning $1.44 versus $0.73 in the prior year. This year, the market expects an improvement in earnings ($1.70 versus $1.44).
-- Written by a member of TheStreet Ratings Staff