NEW YORK (TheStreet) -- RadioShack (RSH) shares are up 4.8% to $0.95 on Monday after the retailer announced that it was talking with a major vendor about potential changes to its commercial arrangement that could be beneficial to an out-of-court restructuring, according to Bloomberg.
While the company isn't certain that these talks will result in changes to its commercial arrangements, it "continues to explore how to optimize its various commercial relationships."
Earlier this month the electronics retailer said that it could be forced to liquidate or seek bankruptcy protection if its financial situation does not turn around soon.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
TheStreet Ratings team rates RADIOSHACK CORP as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate RADIOSHACK CORP (RSH) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 Specialty Retail industry. The net income has significantly decreased by 158.8% when compared to the same quarter one year ago, falling from -$53.10 million to -$137.40 million.
- Net operating cash flow has significantly decreased to -$87.20 million or 289.15% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 76.87%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 154.71% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- RADIOSHACK CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, RADIOSHACK CORP reported poor results of -$3.89 versus -$1.10 in the prior year. This year, the market expects an improvement in earnings (-$3.81 versus -$3.89).
- RSH, with its decline in revenue, underperformed when compared the industry average of 0.0%. Since the same quarter one year prior, revenues fell by 20.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: RSH Ratings Report