Why NutriSystem (NTRI) Stock Is Higher In After-Hours Trading On Thursday

NEW YORK (TheStreet) -- Shares of NutriSystem Inc. (NTRI) are higher 6.45% to $16.51 in after-hours trading on Thursday following the company's release of its first quarter 2014 revenue and earnings results.

The report noted revenue for the weight loss management company increased 16% to $122.2 million for the most recent quarter, from $105.4 million in the 2013 first quarter.

NutriSystem's adjusted EBITDA was $3.2 million, compared to $3.9 million in the same quarter during the previous year.

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First quarter 2014 GAAP earnings of 1 cent per share exceeded GAAP loss per share of -2 cents in the year ago quarter.

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, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."

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

  • NTRI's revenue growth has slightly outpaced the industry average of 1.9%. Since the same quarter one year prior, revenues rose by 11.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 122.22% and other important driving factors, this stock has surged by 81.32% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • 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. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.72 is somewhat weak and could be cause for future problems.
  • 47.74% is the gross profit margin for NUTRISYSTEM INC which we consider to be strong. Regardless of NTRI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.85% trails the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Internet & Catalog Retail industry and the overall market, NUTRISYSTEM INC's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: NTRI Ratings Report
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