NEW YORK (TheStreet) -- Zumiez (ZUMZ) shares were upgraded to "overweight" from "neutral" by analysts at Piper Jaffray (PJC) on Monday. The firm raised the company's price target to $30 from $27.
The action sports apparel retailer opened at $24.65 today, suggesting a 22% price increase on the shares.
Zumiez is up 0.9% to $24.88 in early market trading today.
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TheStreet Ratings team rates ZUMIEZ INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ZUMIEZ INC (ZUMZ) 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, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ZUMZ's revenue growth has slightly outpaced the industry average of 5.9%. Since the same quarter one year prior, revenues slightly increased by 1.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ZUMZ's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ZUMZ has a quick ratio of 2.08, which demonstrates the ability of the company to cover short-term liquidity needs.
- 40.41% is the gross profit margin for ZUMIEZ INC which we consider to be strong. Regardless of ZUMZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ZUMZ's net profit margin of 11.83% compares favorably to the industry average.
- ZUMZ has underperformed the S&P 500 Index, declining 11.97% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Specialty Retail industry and the overall market, ZUMIEZ 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: ZUMZ Ratings Report