Why Bob Evans Farms (BOBE) Stock Is Down In After-Hours Trading

NEW YORK (TheStreet) -- Shares of Bob Evans Farms (BOBE) are down -2.09% to $48.74 in after-hours trading after the restaurant company reported fiscal 2014 fourth quarter and full year results.

The company said net income from continuing operations was $9.8 million, or 40 cents per diluted share, compared with net income from continuing operations of $29.6 million, or $1.05 per diluted share, in the comparable period a year ago.

For the fourth quarter of 2014, non-GAAP net income from continuing operations was $11.8 million, or 48 cents per diluted share -- 7 cents better than the Capital IQ Consensus Estimate of 41 cents-- compared with non-GAAP net income from continuing operations of $19.4 million, or 69 cents per diluted share, in the comparable period last year.

Must Read: Warren Buffett's 25 Favorite Growth Stocks

The company reports fiscal 2014 diluted GAAP EPS from continuing operations of $1.16, compared to $2.90 in the prior year; diluted non-GAAP EPS from continuing operations was $1.68 for the full year, compared to $2.39 in the prior year

Bob Evans updated its fiscal 2015 diluted EPS guidance range set at $1.90 to $2.20. The updated guidance assumes $85 per hundredweight sow costs and gradual improvement in Bob Evans Restaurants' sales trends.

TheStreet Ratings team rates BOB EVANS FARMS as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate BOB EVANS FARMS (BOBE) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

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 110.4% when compared to the same quarter one year prior, rising from -$55.14 million to $5.72 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.77, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.19 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.8%. Since the same quarter one year prior, revenues slightly dropped by 0.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • In its most recent trading session, BOBE has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • You can view the full analysis from the report here: BOBE Ratings Report

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

More from Markets

Asian Markets Decline in Morning Trading

Asian Markets Decline in Morning Trading

Verizon Proves Resilient in Sell-Off; Decoding the Facebook Short -- ICYMI

Verizon Proves Resilient in Sell-Off; Decoding the Facebook Short -- ICYMI

Three Big Factors That Rocked the Stock Market Tuesday

Three Big Factors That Rocked the Stock Market Tuesday

Dow Tumbles Over 400 Points; S&P 500 and Nasdaq Also Finish Lower

Dow Tumbles Over 400 Points; S&P 500 and Nasdaq Also Finish Lower

Caterpillar Bulldozes Industrial Sector With Bad News on Earnings Call

Caterpillar Bulldozes Industrial Sector With Bad News on Earnings Call