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NEW YORK (TheStreet) -- Big 5 Sporting Goods (BGFV) has been upgraded by TheStreet Ratings from Hold to Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate BIG 5 SPORTING GOODS CORP (BGFV) a BUY. This is driven by several positive factors, 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, attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BGFV's revenue growth has slightly outpaced the industry average of 1.2%. Since the same quarter one year prior, revenues slightly increased by 2.2%. 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.
- Net operating cash flow has significantly increased by 84.72% to $27.29 million when compared to the same quarter last year. In addition, BIG 5 SPORTING GOODS CORP has also vastly surpassed the industry average cash flow growth rate of 22.91%.
- BGFV's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.10 is very weak and demonstrates a lack of ability to pay short-term obligations.
- BIG 5 SPORTING GOODS CORP's earnings per share declined by 17.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, BIG 5 SPORTING GOODS CORP increased its bottom line by earning $1.26 versus $0.70 in the prior year. For the next year, the market is expecting a contraction of 38.5% in earnings ($0.78 versus $1.26).
- You can view the full analysis from the report here: BGFV Ratings Report