The firm said it reduced its rating on the sports apparel and footwear retailer as recent store checks suggest the company could be facing market share losses.
Morgan Stanley has a $34 price target on Finish Line.
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Separately, TheStreet Ratings team rates FINISH LINE INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate FINISH LINE INC (FINL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 0.0%. Since the same quarter one year prior, revenues rose by 15.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- FINL 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. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.31, which illustrates the ability to avoid short-term cash problems.
- Powered by its strong earnings growth of 150.00% and other important driving factors, this stock has surged by 34.93% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FINL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- FINISH LINE INC reported significant earnings per share improvement 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 year. We feel that this trend should continue. During the past fiscal year, FINISH LINE INC increased its bottom line by earning $1.56 versus $1.42 in the prior year. This year, the market expects an improvement in earnings ($1.88 versus $1.56).
- 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 145.0% when compared to the same quarter one year prior, rising from $5.08 million to $12.44 million.
- You can view the full analysis from the report here: FINL Ratings Report