Why Nutrisystem (NTRI) Is Down Today

NEW YORK (TheStreet) -- Nutrisystem  (NTRI) fell 10.43% to $15.06 at the close of the trading day on Thursday after the company's guidance came up short of analysts' expectations.

Nutrisystem, which makes weight loss products, forecast earnings per share at a loss of 2 cents to a loss of 7 cents for the first-quarter of fiscal 2014. Nutrisystem also forecast revenue of $116 million to $121 million, while the consensus estimate calls for $117 million. For the full year, Nutrisystem expects EPS of 51 cents to 61 cents and revenue of $385 million to $405 million. The consensus estimate calls for EPS of 62 cents on revenue of $395.5 million. 

For the fourth-quarter, the company reported earnings per share of 4 cents, which edged analysts' estimates of 2 cents. Revenue totaled $69.9 million, which also bear the consensus estimate of $67 million.

The stock amassed a volume of 2,293,947. more than triple its average of 555,241. It hit a high of $16.33 and a low of $14.90 for the day. The stock has a one-year high of $20.54 and a one-year low of $7.18.

Must Read: Nutrisystem Reports Second Consecutive Quarter Of Year-over-Year Revenue Growth

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TheStreet Ratings team rates NUTRISYSTEM INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate NUTRISYSTEM INC (NTRI) 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, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and feeble growth in the company's earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.5%. Since the same quarter one year prior, revenues slightly increased by 5.0%. 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.
  • NTRI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.06, which illustrates the ability to avoid short-term cash problems.
  • Compared to its closing price of one year ago, NTRI's share price has jumped by 81.83%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • NUTRISYSTEM INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, NUTRISYSTEM INC swung to a loss, reporting -$0.11 versus $0.43 in the prior year. This year, the market expects an improvement in earnings ($0.40 versus -$0.11).
  • 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 Internet & Catalog Retail industry. The net income has significantly decreased by 86.3% when compared to the same quarter one year ago, falling from $2.59 million to $0.36 million.
  • You can view the full analysis from the report here: NTRI Ratings Report

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