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"We rate BOB EVANS FARMS (BOBE) 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 growth in earnings per share. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BOBE's revenue growth has slightly outpaced the industry average of 9.3%. Since the same quarter one year prior, revenues slightly increased by 0.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- BOB EVANS FARMS has improved earnings per share by 8.7% 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, BOB EVANS FARMS reported lower earnings of $1.18 versus $2.92 in the prior year. This year, the market expects an improvement in earnings ($1.90 versus $1.18).
- In its most recent trading session, BOBE 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. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- Net operating cash flow has decreased to $20.66 million or 10.43% when compared to the same quarter last year. Despite a decrease in cash flow of 10.43%, BOB EVANS FARMS is in line with the industry average cash flow growth rate of -17.57%.
- Even though the current debt-to-equity ratio is 1.25, it is still below the industry average, suggesting that this level of debt is acceptable within the Hotels, Restaurants & Leisure industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.43 is very low and demonstrates very weak liquidity.
- You can view the full analysis from the report here: BOBE Ratings Report