NEW YORK (TheStreet) -- 1-800-Flowers.Com (FLWS) shares were up 16.1% to $5.98 on Tuesday after announcing that it is purchasing Harry & David Holdings for $142.5 million in cash.
The deal includes Harry & Davids 47 retail stores and Oregon headquarters.
The food shipping company's will become a wholly owned subsidiary of 1-800-Flowers.Com with the company's management team remaining in place according to a joint statement released by the companies today.
Must Read: 50 Stocks Hedge Funds Love
Shares continue to climb in after-hour trading today, up 0.16% to $5.99.
TheStreet Ratings team rates 1-800-FLOWERS.COM as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate 1-800-FLOWERS.COM (FLWS) 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 reasonable valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has slightly increased to $5.74 million or 2.60% when compared to the same quarter last year. In addition, 1-800-FLOWERS.COM has also modestly surpassed the industry average cash flow growth rate of 0.30%.
- FLWS's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.25 is very weak and demonstrates a lack of ability to pay short-term obligations.
- 40.95% is the gross profit margin for 1-800-FLOWERS.COM which we consider to be strong. Regardless of FLWS'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 -0.79% trails the industry average.
- 1-800-FLOWERS.COM 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, 1-800-FLOWERS.COM increased its bottom line by earning $0.23 versus $0.19 in the prior year. This year, the market expects earnings to be in line with last year ($0.23 versus $0.23).
- You can view the full analysis from the report here: FLWS Ratings Report
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE.