The fall comes following disappointing second quarter earnings results released Tuesday.
The consumer products manufacturer posted earnings of $10.3 million, or 67 cents per share, during the quarter. That number is down from the $10.46 million in revenue in the second quarter of 2013.
Analysts consensus estimates had EPS earnings at 68 cents per share for the company.
Revenue was up to $94.2 million, a 9% increase from the same quarter last year. Revenue for this quarter beat analysts estimates of $92.3 million.
WD-40 set a full year 2014 guidance of $383 million to $398 million in revenue with earnings of $40.5 to $42.8 million.
TheStreet Ratings team rates WD-40 CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate WD-40 CO (WDFC) 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, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- WDFC's revenue growth has slightly outpaced the industry average of 1.0%. Since the same quarter one year prior, revenues slightly increased by 0.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.32, which illustrates the ability to avoid short-term cash problems.
- WD-40 CO has improved earnings per share by 7.2% 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, WD-40 CO increased its bottom line by earning $2.54 versus $2.20 in the prior year. This year, the market expects an improvement in earnings ($2.75 versus $2.54).
- The gross profit margin for WD-40 CO is rather high; currently it is at 52.81%. 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 12.01% trails the industry average.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 50.68% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- You can view the full analysis from the report here: WDFC Ratings Report