NEW YORK (TheStreet) -- Shares of Dick's Sporting Goods (DKS) are falling 5.93% to $41.85 in pre-market trades as the sports and fitness retail company's rating was cut to "market perform" from "outperform" at William Blair this morning.
Analysts at the firm cited competition concerns and above-average risk of share loss to e-commerce giant Amazon.com (AMZN) .
William Blair said its research shows that the majority of the assortment in a Dick's store is also sold on Amazon.
Separately, TheStreet Ratings team rates DICKS SPORTING GOODS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate DICKS SPORTING GOODS INC (DKS) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
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 10.3%. 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.
- Net operating cash flow has significantly increased by 71.24% to $138.30 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 24.41%.
- DKS's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.18 is very weak and demonstrates a lack of ability to pay short-term obligations.
- DICKS SPORTING GOODS INC's earnings per share declined by 14.9% in the most recent quarter compared to the same quarter a year ago. 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, DICKS SPORTING GOODS INC increased its bottom line by earning $2.70 versus $2.31 in the prior year. This year, the market expects an improvement in earnings ($2.79 versus $2.70).
- You can view the full analysis from the report here: DKS Ratings Report