Express Inc. Stock Downgraded (EXPR)

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.

NEW YORK ( TheStreet) -- Express (NYSE: EXPR) has been downgraded by TheStreet Ratings from buy to hold. 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 weak operating cash flow, a generally disappointing performance in the stock itself and generally higher debt management risk.

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Highlights from the ratings report include:
  • EXPR's revenue growth has slightly outpaced the industry average of 6.8%. Since the same quarter one year prior, revenues slightly increased by 7.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 36.29% is the gross profit margin for EXPRESS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 3.83% trails the industry average.
  • Despite currently having a low debt-to-equity ratio of 0.47, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that EXPR's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.57 is low and demonstrates weak liquidity.
  • Net operating cash flow has significantly decreased to $1.11 million or 92.55% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Express, Inc. operates as a specialty apparel and accessory retailer primarily in the United States. Its stores provide apparel and accessories for women and men between 20 and 30 years old across various aspects of the lifestyles comprising work, casual, jeanswear, and going-out occasions. Express has a market cap of $1.48 billion and is part of the services sector and retail industry. Shares are down 5.7% year to date as of the close of trading on Tuesday.

You can view the full Express Ratings Report or get investment ideas from our investment research center.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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