Three Reasons Rite Aid's (RAD) Fourth Quarter Impressed Wall Street

NEW YORK (TheStreet) -- Rite Aid (RAD) stock is spiking on Thursday after the company impressed investors in its latest quarterly report. Three points from its earnings report pleased Wall Street.

First, quarterly sales for the three months to February beat expectations. The third-largest drugstore chain in the U.S. generated revenue of $6.6 billion. Analysts surveyed by Thomson Reuters had anticipated revenue of $6.54 billion.

Then, profits came in better than expected. Over the three-month period, Rite Aid recorded net income of 6 cents a share, 2 cents higher than consensus.

Finally, fiscal 2015 guidance met analysts' expectations. The Camp Hill, Penn.-based business said it expects sales between $26 billion and $26.5 billion with same-store sales increasing 2.5% to $4.5%. Net income is expected in the range of 31 cents to 42 cents.

For the year ending February next year, analysts had forecast earnings of 35 cents a share and revenue of $25.7 billion.

By late morning, shares had added 10.9% to $7.09. Trading volume of 64.1 million was more than triple its three-month daily average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings team rates RITE AID CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate RITE AID CORP (RAD) 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, compelling growth in net income and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow."

If you liked this article you might like

Healthcare and Tax Reform Crowd the Final Week of September

Walgreens Is Primed to Rally, With or Without Rite Aid

S&P 500 and Dow Score Records With Wall Street Upbeat Ahead of Fed

S&P 500 and Dow on Track for Records With Markets in Good Mood Ahead of Fed

Walgreens to Tweak Number of Rite Aid Stores It Buys to Win Regulatory Approval