The firm set a price target of $48 for the New Jersey-based retailer of nutritional supplements, down from its previous mark of $49.
Goldman Sachs said the company's margin recovery has yet to materialize due to investments and a number of fundamental factors, and share upside has become less compelling.
"We continue to expect an inflection in EPS growth in 4Q14, but now see greater upside in shares of GNC Holdings (GNC) ," said analysts at Goldman Sachs.
Shares of Vitamin Shoppe closed up 3.59% to $47.07 on Thursday.
Separately, TheStreet Ratings team rates VITAMIN SHOPPE INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate VITAMIN SHOPPE INC (VSI) a BUY. This is driven by multiple 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 and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 1.4%. Since the same quarter one year prior, revenues rose by 13.4%. 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.
- VSI 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. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.38 is very weak and demonstrates a lack of ability to pay short-term obligations.
- VITAMIN SHOPPE INC's earnings per share declined by 24.5% 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, VITAMIN SHOPPE INC increased its bottom line by earning $2.18 versus $2.02 in the prior year. This year, the market expects an improvement in earnings ($2.24 versus $2.18).
- 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 25.0% when compared to the same quarter one year ago, falling from $16.27 million to $12.20 million.
- In its most recent trading session, VSI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Despite the stock's decline during the last year, it is still somewhat more expensive (in proportion to its earnings over the last year) than most other stocks in its industry. We feel, however, that other strengths this company displays offset this slight negative.
- You can view the full analysis from the report here: VSI Ratings Report