Trade-Ideas: Vera Bradley (VRA) Is Today's Pre-Market Mover With Heavy Volume Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Vera Bradley ( VRA) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Vera Bradley as such a stock due to the following factors:

  • VRA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.4 million.
  • VRA traded 58,419 shares today in the pre-market hours as of 8:54 AM, representing 11.9% of its average daily volume.

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More details on VRA:

Vera Bradley, Inc., through its subsidiary, Vera Bradley Designs, Inc., designs, produces, markets, and retails accessories for women. VRA has a PE ratio of 11.6. Currently there are 2 analysts that rate Vera Bradley a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Vera Bradley has been 415,000 shares per day over the past 30 days. Vera Bradley has a market cap of $765.4 million and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.25 and a short float of 86.5% with 22.64 days to cover. Shares are down 24.4% year to date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Vera Bradley as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income has significantly decreased by 27.2% when compared to the same quarter one year ago, falling from $12.63 million to $9.19 million.
  • Net operating cash flow has significantly decreased to $14.88 million or 51.50% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • In its most recent trading session, VRA has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, VERA BRADLEY INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • VRA's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that VRA's debt-to-equity ratio is low, the quick ratio, which is currently 0.68, displays a potential problem in covering short-term cash needs.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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