The firm said it raised Boulder Brands' rating because potentially lower commodity costs and reduced expectations have created attractive risk/reward at current levels.
The firm set a price target of $13 for the health and wellness food solutions provider, up from its previous mark of $11.
Piper Jaffray also increased its annual revenue estimates to $523.9 million, from $522.6 million for fiscal 2014, and to $583.5 million, from $579.3 million for fiscal 2015.
"We believe the recent pullback in shares, potentially lower commodity costs and dramatically reduced earnings estimates have created an attractive risk/reward at current levels," said Piper Jaffray analyst Sean P. Naughton.
Separately, TheStreet Ratings team rates BOULDER BRANDS INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate BOULDER BRANDS INC (BDBD) 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 robust revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 0.5%. Since the same quarter one year prior, revenues rose by 18.7%. 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.
- BOULDER BRANDS INC's earnings per share declined by 20.0% 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, BOULDER BRANDS INC increased its bottom line by earning $0.16 versus $0.07 in the prior year. This year, the market expects an improvement in earnings ($0.24 versus $0.16).
- 39.97% is the gross profit margin for BOULDER BRANDS INC which we consider to be strong. Regardless of BDBD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.12% trails the industry average.
- Net operating cash flow has significantly decreased to $2.88 million or 73.27% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Looking at the price performance of BDBD's shares over the past 12 months, there is not much good news to report: the stock is down 46.15%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, BDBD is still more expensive than most of the other companies in its industry.
- You can view the full analysis from the report here: BDBD Ratings Report