NEW YORK (TheStreet) -- Shares of Cache Inc. (CACH are lower -1.73% to $1.70 on Monday after the company reported a net loss of -$10.8 million, or 51 cents per share for the 2014 first quarter, compared to a net loss of -$17.8 million, or $1.33 per share from the year ago quarter.
TheStreet Ratings team rates CACHE INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate CACHE INC (CACH) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Specialty Retail industry and the overall market, CACHE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to $0.03 million or 99.28% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- CACH's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 47.30%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- CACH, with its decline in revenue, slightly underperformed the industry average of 5.3%. Since the same quarter one year prior, revenues slightly dropped by 8.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- CACH 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. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.28 is very weak and demonstrates a lack of ability to pay short-term obligations.
- You can view the full analysis from the report here: CACH Ratings Report