"The fortunes of Big 5 Sporting Goods...retailer with 425 stores... waned in the past year, but could turn positive soon," wrote Barron's over the weekend.
"At a recent $12.07, Big 5 has allure once again. Shares trade for just nine times next year's consensus earnings estimate, well below an average of 18 times for peers such as Dick's Sporting Goods (DKS - Get Report), and Hibbert Sports (HIBB - Get Report)." the publication noted.
TheStreet Ratings team rates BIG 5 SPORTING GOODS CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate BIG 5 SPORTING GOODS CORP (BGFV) 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 reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The current debt-to-equity ratio, 0.30, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.10 is very weak and demonstrates a lack of ability to pay short-term obligations.
- BGFV, with its decline in revenue, slightly underperformed the industry average of 5.3%. Since the same quarter one year prior, revenues slightly dropped by 6.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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. In comparison to the other companies in the Specialty Retail industry and the overall market, BIG 5 SPORTING GOODS CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The gross profit margin for BIG 5 SPORTING GOODS CORP is currently lower than what is desirable, coming in at 31.43%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.89% trails that of the industry average.
- You can view the full analysis from the report here: BGFV Ratings Report