Pre-Market Laggard: Michael Kors Holdings (KORS)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Michael Kors Holdings ( KORS) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Michael Kors Holdings as such a stock due to the following factors:

  • KORS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $173.9 million.
  • KORS traded 39,456 shares today in the pre-market hours as of 7:28 AM.
  • KORS is down 6.9% today from Friday's close.

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More details on KORS:

Michael Kors Holdings Limited is engaged in the design, marketing, distribution, and retailing of branded women's apparel and accessories, and men's apparel. The company operates in three segments: Retail, Wholesale, and Licensing. KORS has a PE ratio of 22.1. Currently there are 6 analysts that rate Michael Kors Holdings a buy, 2 analysts rate it a sell, and 9 rate it a hold.

The average volume for Michael Kors Holdings has been 3.4 million shares per day over the past 30 days. Michael Kors has a market cap of $16.0 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.98 and a short float of 5.3% with 4.10 days to cover. Shares are down 3.2% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Michael Kors Holdings as a buy. 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, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 14.7%. Since the same quarter one year prior, revenues rose by 43.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • KORS 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 this, the company maintains a quick ratio of 4.20, which clearly demonstrates the ability to cover short-term cash needs.
  • MICHAEL KORS HOLDINGS LTD has improved earnings per share by 49.2% 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 two years. We feel that this trend should continue. During the past fiscal year, MICHAEL KORS HOLDINGS LTD increased its bottom line by earning $3.21 versus $1.97 in the prior year. This year, the market expects an improvement in earnings ($4.06 versus $3.21).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income increased by 50.2% when compared to the same quarter one year prior, rising from $125.00 million to $187.72 million.
  • The gross profit margin for MICHAEL KORS HOLDINGS LTD is rather high; currently it is at 62.19%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.42% is above that of the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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