NEW YORK (TheStreet) -- Vitamin Shoppe (VSI) shares plunged after William Blair issued a downgrade to "perform" from "outperform." The analyst firm justified the call on the view the health food store had limited upside to analyst estimates as it contends flagging consumer spending and an increased number of competitors.
By midday, shares had given up 4.9% to $46.36, contributing to an overall 10.9% decrease since the beginning of the year.VSI data by YCharts
TheStreet Ratings team rates VITAMIN SHOPPE INC as a Buy with a ratings score of B. The team has this to say about their recommendation:
"We rate VITAMIN SHOPPE INC (VSI) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- VSI's revenue growth has slightly outpaced the industry average of 7.7%. Since the same quarter one year prior, revenues rose by 14.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- VITAMIN SHOPPE INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, VITAMIN SHOPPE INC increased its bottom line by earning $2.02 versus $1.52 in the prior year. This year, the market expects an improvement in earnings ($2.28 versus $2.02).
- The gross profit margin for VITAMIN SHOPPE INC is currently lower than what is desirable, coming in at 34.15%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.97% trails that of the industry average.
- Net operating cash flow has significantly decreased to $8.29 million or 61.50% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: VSI Ratings Report