Story updated at 10 a.m. to reflect market activity.
Cabelas fell 1.4% to $66.71 in morning trading.
The firm set a $71 price target for the retailer. DA Davidson analysts said Cabelas faces near-term growth headwinds.
Must read: Warren Buffett's 10 Favorite Growth Stocks
Separately, TheStreet Ratings team rates CABELAS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate CABELAS INC (CAB) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 6.6%. Since the same quarter one year prior, revenues slightly increased by 4.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CABELAS INC has improved earnings per share by 17.9% 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, CABELAS INC increased its bottom line by earning $3.14 versus $2.42 in the prior year. This year, the market expects an improvement in earnings ($3.61 versus $3.14).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Specialty Retail industry average. The net income increased by 17.8% when compared to the same quarter one year prior, going from $68.03 million to $80.11 million.
- 42.08% is the gross profit margin for CABELAS 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 6.73% is above that of the industry average.
- Net operating cash flow has increased to $250.81 million or 41.66% when compared to the same quarter last year. In addition, CABELAS INC has also vastly surpassed the industry average cash flow growth rate of -9.26%.
- You can view the full analysis from the report here: CAB Ratings Report