Whole Foods Market (WFM): Today's Post-Market Laggard

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 Whole Foods Market ( WFM) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Whole Foods Market as such a stock due to the following factors:

  • WFM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $219.2 million.
  • WFM is down 8% today from today's close.

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More details on WFM:

Whole Foods Market, Inc. operates as a retailer of natural and organic foods. The stock currently has a dividend yield of 0.9%. WFM has a PE ratio of 37.4. Currently there are 14 analysts that rate Whole Foods Market a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Whole Foods Market has been 3.5 million shares per day over the past 30 days. Whole Foods Market has a market cap of $20.5 billion and is part of the services sector and retail industry. The stock has a beta of 0.75 and a short float of 2.9% with 2.50 days to cover. Shares are down 3.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Whole Foods Market as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • WFM's revenue growth has slightly outpaced the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 2.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • WFM's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.22, which illustrates the ability to avoid short-term cash problems.
  • WHOLE FOODS MARKET INC has improved earnings per share by 6.7% 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 two years. We feel that this trend should continue. During the past fiscal year, WHOLE FOODS MARKET INC increased its bottom line by earning $1.47 versus $1.26 in the prior year. This year, the market expects an improvement in earnings ($1.68 versus $1.47).
  • 38.41% is the gross profit margin for WHOLE FOODS MARKET INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 4.06% is above that of the industry average.
  • The net income growth from the same quarter one year ago has exceeded that of the Food & Staples Retailing industry average, but is less than that of the S&P 500. The net income increased by 7.3% when compared to the same quarter one year prior, going from $112.73 million to $121.00 million.

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