Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK ( TheStreet) -- Vitacost.com (Nasdaq: VITC) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself.
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- VITC's revenue growth has slightly outpaced the industry average of 25.2%. Since the same quarter one year prior, revenues rose by 26.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Internet & Catalog Retail industry average. The net income increased by 11.0% when compared to the same quarter one year prior, going from -$3.57 million to -$3.17 million.
- VITACOST.COM INC has improved earnings per share by 30.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VITACOST.COM INC reported poor results of -$0.58 versus -$0.45 in the prior year. This year, the market expects an improvement in earnings (-$0.44 versus -$0.58).
- VITC has underperformed the S&P 500 Index, declining 9.88% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The gross profit margin for VITACOST.COM INC is rather low; currently it is at 22.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.73% trails that of the industry average.
-- Written by a member of TheStreet Ratings Staff