Vera Bradley (VRA) Highlighted As Today's Perilous Reversal 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 Vera Bradley ( VRA) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Vera Bradley as such a stock due to the following factors:

  • VRA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.8 million.
  • VRA has traded 170,173 shares today.
  • VRA is down 3.4% today.
  • VRA was up 8.6% yesterday.

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More details on VRA:

Vera Bradley, Inc., through its subsidiaries, designs, produces, markets, and retails functional accessories for women. VRA has a PE ratio of 15.1. Currently there are 2 analysts that rate Vera Bradley a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Vera Bradley has been 437,400 shares per day over the past 30 days. Vera Bradley has a market cap of $879.2 million and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.48 and a short float of 81.7% with 15.80 days to cover. Shares are down 2.4% year-to-date as of the close of trading on Monday.

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 Vera Bradley as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • VRA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, VRA has a quick ratio of 1.66, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • VERA BRADLEY INC's earnings per share declined by 30.4% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, VERA BRADLEY INC reported lower earnings of $1.45 versus $1.70 in the prior year. For the next year, the market is expecting a contraction of 27.6% in earnings ($1.05 versus $1.45).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income has significantly decreased by 28.5% when compared to the same quarter one year ago, falling from $9.19 million to $6.57 million.

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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