NEW YORK (TheStreet) -- Shares of Vitamin Shoppe Inc (VSI) are down 1.46% to $43.13 after analysts at Sterne Agee said the company may sell itself after CEO Tony Truesdale announced on Wednesday that he would retire effective June 2015.
The firm said the news was surprising because of Truesdale's age --52-- and several of the company's recent initiatives, including Vitamin Shoppe's move into manufacturing through its acquisition of nutritional product maker Nutri-Force.
Sterne Agee added that the company could be thinking about selling itself to competitor GNC (GNC) or a private equity firm, and kept its $53 price target and a "buy" rating on shares of Vitamin Shoppe.
Separately, TheStreet Ratings team rates VITAMIN SHOPPE INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate VITAMIN SHOPPE INC (VSI) 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, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- VSI's revenue growth has slightly outpaced the industry average of 0.3%. Since the same quarter one year prior, revenues slightly increased by 9.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- VSI 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. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.29 is very weak and demonstrates a lack of ability to pay short-term obligations.
- 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 7.3% when compared to the same quarter one year ago, dropping from $18.26 million to $16.93 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Specialty Retail industry and the overall market, VITAMIN SHOPPE INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: VSI Ratings Report
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