Will This Analyst Downgrade Hurt Conn's (CONN) Stock Today?

NEW YORK (TheStreet) -- Shares of Conn's  (CONN) were up 0.97% to $31.30 in pre-market trading Wednesday despite Stifel Nicolaus'  (SF) downgrading the stock to "hold" from "buy."

The firm said the credit said of the business is disappointing.

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Separately, TheStreet Ratings team rates CONN'S INC as a "buy" with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CONN'S INC (CONN) a BUY. This is driven by a few notable 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 robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • The revenue growth greatly exceeded the industry average of 0.5%. Since the same quarter one year prior, revenues rose by 33.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CONN'S INC has improved earnings per share by 26.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CONN'S INC increased its bottom line by earning $2.54 versus $1.55 in the prior year. This year, the market expects an improvement in earnings ($3.55 versus $2.54).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 28.4% when compared to the same quarter one year prior, rising from $22.18 million to $28.47 million.
  • The gross profit margin for CONN'S INC is rather high; currently it is at 52.83%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.49% is above that of the industry average.
  • Net operating cash flow has significantly increased by 571.02% to $30.68 million when compared to the same quarter last year. In addition, CONN'S INC has also vastly surpassed the industry average cash flow growth rate of 21.89%.
  • You can view the full analysis from the report here: CONN Ratings Report

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