"Down 32% over the past 3 months (to just 5.0x fwd EV/EBITDA), with short interest of 10% and just a 31% Buy recommendation ratio, we believe shares of BIG more than discount the execution risks associated with the new CEO's vision to make Big Lots a more relevant retailer," the research note states.
"While we acknowledge an increasingly competitive environment and headwinds faced by consumers, BIG has the lowest sales productivity in our universe."
The stock was rising 5.29% to $27.69 shortly after the market opened on Tuesday.
Separately, TheStreet Ratings team rates BIG LOTS INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate BIG LOTS INC (BIG) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows: