Trade-Ideas: Rite Aid (RAD) Is Today's Pre-Market Laggard Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Rite Aid ( RAD) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Rite Aid as such a stock due to the following factors:

  • RAD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $162.5 million.
  • RAD traded 288,977 shares today in the pre-market hours as of 8:04 AM.
  • RAD is down 4.7% today from yesterday's close.

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More details on RAD:

Rite Aid Corporation, through its subsidiaries, operates a chain of retail drugstores in the United States. RAD has a PE ratio of 36.1. Currently there are 3 analysts that rate Rite Aid a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Rite Aid has been 24.6 million shares per day over the past 30 days. Rite Aid has a market cap of $8.1 billion and is part of the services sector and retail industry. The stock has a beta of 1.71 and a short float of 4.6% with 2.21 days to cover. Shares are up 63.4% year-to-date as of the close of trading on Tuesday.

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

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Rite Aid as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • RAD's revenue growth has slightly outpaced the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 2.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • RITE AID CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, RITE AID CORP increased its bottom line by earning $0.22 versus $0.12 in the prior year. This year, the market expects an improvement in earnings ($0.38 versus $0.22).
  • Compared to its closing price of one year ago, RAD's share price has jumped by 182.15%, exceeding the performance of the broader market during that same time frame. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • The gross profit margin for RITE AID CORP is currently lower than what is desirable, coming in at 30.13%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.83% trails that of the industry average.
  • Net operating cash flow has decreased to $194.13 million or 11.90% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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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