Story updated at 10 a.m. to reflect market activity.
Shares of Sally Beauty gained 2.2% to $27.82 in morning trading.
The analyst firm also raised its EPS estimates for the retailer. Sally Beauty's growth should begin to re-accelerate, according to Sterne Agee analysts.
Separately, TheStreet Ratings team rates SALLY BEAUTY HOLDINGS INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SALLY BEAUTY HOLDINGS INC (SBH) 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 revenue growth, increase in stock price during the past year and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SBH's revenue growth has slightly outpaced the industry average of 0.3%. Since the same quarter one year prior, revenues slightly increased by 4.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- SALLY BEAUTY HOLDINGS INC reported flat earnings per share in the most recent quarter. 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, SALLY BEAUTY HOLDINGS INC increased its bottom line by earning $1.48 versus $1.23 in the prior year. This year, the market expects an improvement in earnings ($1.53 versus $1.48).
- 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. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- Net operating cash flow has decreased to $34.56 million or 43.30% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Specialty Retail industry average. The net income has decreased by 6.5% when compared to the same quarter one year ago, dropping from $72.47 million to $67.76 million.
- You can view the full analysis from the report here: SBH Ratings Report
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