NEW YORK (TheStreet) -- Liberty Ventures (LVNTA) shares are down 12.1% to $32.31 on Monday after the company announced that its board of directors approved a change in attribution from the Liberty Interactive Group to the Liberty Ventures Group for its digital commerce companies.
In return for the new attribution, Liberty Interactive Group (LINTA) shareholders will receive 67.67 million shares of Liberty Ventures common stock, or 14% of a Liberty Ventures share for each share of Liberty Interactive Group common stock they hold.
Analysts at FBR Capital lowered Liberty Interactive's price target to $42 from $49 on Monday, conversely, analysts at Topeka set a "buy" rating on Liberty Interactive Group, while raising its price target to $35 from $34.
Liberty Interactive Group shares are up 5.2% to $29.59 on Monday.
TheStreet Ratings team rates LIBERTY VENTURES as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate LIBERTY VENTURES (LVNTA) a SELL. This is driven by a number of negative factors, 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 feeble growth in its earnings per share, deteriorating net income, generally high debt management risk and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- LIBERTY VENTURES 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. For the next year, the market is expecting a contraction of 63.6% in earnings ($0.30 versus $0.83).
- 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 Internet & Catalog Retail industry. The net income has significantly decreased by 354.5% when compared to the same quarter one year ago, falling from $11.00 million to -$28.00 million.
- The debt-to-equity ratio is very high at 4.83 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, LVNTA maintains a poor quick ratio of 0.82, which illustrates the inability to avoid short-term cash problems.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Internet & Catalog Retail industry and the overall market, LIBERTY VENTURES's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for LIBERTY VENTURES is currently very high, coming in at 84.21%. Regardless of LVNTA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LVNTA's net profit margin of -8.66% significantly underperformed when compared to the industry average.
- You can view the full analysis from the report here: LVNTA Ratings Report