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"We rate POST HOLDINGS INC (POST) 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 and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- POST's very impressive revenue growth greatly exceeded the industry average of 1.9%. Since the same quarter one year prior, revenues leaped by 257.6%. 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 104.90% to $108.60 million when compared to the same quarter last year. In addition, POST HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of 33.26%.
- POST HOLDINGS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, POST HOLDINGS INC swung to a loss, reporting -$7.60 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($0.51 versus -$7.60).
- The gross profit margin for POST HOLDINGS INC is rather low; currently it is at 24.93%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -27.55% is significantly below that of the industry average.
- 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 Food Products industry. The net income has significantly decreased by 31833.3% when compared to the same quarter one year ago, falling from -$0.90 million to -$287.40 million.
- You can view the full analysis from the report here: POST Ratings Report