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NEW YORK (TheStreet) -- Nu Skin Enterprises (NUS) has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate NU SKIN ENTERPRISES (NUS) 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 attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Although NUS's debt-to-equity ratio of 0.20 is very low, it is currently higher than that of the industry average. Despite the fact that NUS's debt-to-equity ratio is low, the quick ratio, which is currently 0.55, displays a potential problem in covering short-term cash needs.
- The gross profit margin for NU SKIN ENTERPRISES is currently very high, coming in at 82.89%. Regardless of NUS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NUS's net profit margin of 10.69% compares favorably to the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 63.37%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 37.77% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Personal Products industry. The net income has significantly decreased by 38.4% when compared to the same quarter one year ago, falling from $110.90 million to $68.31 million.
- You can view the full analysis from the report here: NUS Ratings Report