Why PriceSmart (PSMT) Stock Is Higher On Monday

NEW YORK (TheStreet) -- Shares of PriceSmart Inc. (PSMT) are up 3.07% to $95.57 on Monday after the shopping warehouse chain received a ratings upgrade.

PriceSmart was upgraded to "buy" from "neutral" at Roth Capital Partners due to a recent pullback in shares.

Roth also raised its price target on the stock to $108 from $105.

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TheStreet Ratings team rates PRICESMART INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate PRICESMART INC (PSMT) 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, growth in earnings per share, increase in net income, notable return on equity and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."

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

  • The revenue growth came in higher than the industry average of 6.4%. Since the same quarter one year prior, revenues rose by 11.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PRICESMART INC has improved earnings per share by 13.4% 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, PRICESMART INC increased its bottom line by earning $2.78 versus $2.24 in the prior year. This year, the market expects an improvement in earnings ($3.15 versus $2.78).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Food & Staples Retailing industry average, but is less than that of the S&P 500. The net income increased by 13.6% when compared to the same quarter one year prior, going from $24.88 million to $28.28 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Food & Staples Retailing industry and the overall market, PRICESMART INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $73.35 million or 37.88% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -7.09%.
  • You can view the full analysis from the report here: PSMT Ratings Report

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

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