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"We rate CABELAS INC (CAB) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and generally higher debt management risk."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CAB's revenue growth has slightly outpaced the industry average of 1.4%. Since the same quarter one year prior, revenues slightly increased by 4.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CABELAS INC has improved earnings per share by 7.1% 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. This trend suggests that the performance of the business is improving. During the past fiscal year, CABELAS INC increased its bottom line by earning $3.14 versus $2.42 in the prior year. This year, the market expects an improvement in earnings ($3.15 versus $3.14).
- Net operating cash flow has slightly increased to -$85.96 million or 2.89% when compared to the same quarter last year. Despite an increase in cash flow, CABELAS INC's cash flow growth rate is still lower than the industry average growth rate of 20.25%.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Specialty Retail industry and the overall market, CABELAS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- CAB has underperformed the S&P 500 Index, declining 19.05% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full analysis from the report here: CAB Ratings Report