Why Isle of Capri Casinos (ISLE) Stock Is Higher Today

NEW YORK (TheStreet) -- Shares of Isle of Capri Casinos  (ISLE) are up 2.96% to $6.95 after it reported net revenue for the fourth quarter of $260.8 million compared to $257.4 million in the year ago period.

On an adjusted basis, the company earned 34 cents per share for the fourth quarter, compared to 19 cents per share a year ago.

Analysts polled by Thompson Reuters had expected earnings per share of 22 cents for the quarter.

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TheStreet Ratings team rates ISLE OF CAPRI CASINOS INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate ISLE OF CAPRI CASINOS INC (ISLE) 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 compelling growth in net income, growth in earnings per share and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and weak operating cash flow."

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

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 587.5% when compared to the same quarter one year prior, rising from -$2.19 million to $10.66 million.
  • ISLE OF CAPRI CASINOS INC reported significant earnings per share improvement in the most recent quarter compared to 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, ISLE OF CAPRI CASINOS INC reported poor results of -$1.28 versus -$0.46 in the prior year. This year, the market expects an improvement in earnings (-$0.07 versus -$1.28).
  • 44.38% is the gross profit margin for ISLE OF CAPRI CASINOS INC which we consider to be strong. Regardless of ISLE'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 4.75% trails the industry average.
  • The debt-to-equity ratio is very high at 7.17 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, ISLE maintains a poor quick ratio of 0.78, which illustrates the inability to avoid short-term cash problems.
  • 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 Hotels, Restaurants & Leisure industry and the overall market, ISLE OF CAPRI CASINOS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: ISLE Ratings Report
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