One Reason Bob Evans Farms (BOBE) Stock Is Rising Today in Pre-Market Trading

NEW YORK (TheStreet) -- Shares of Bob Evans Farms Inc. (BOBE) are higher by 2.95% to $52 in pre-market trading on Monday morning, following the company's announcement its CEO, Steve Davis, has "by mutual agreement with Bob Evans board of directors" decided to step down.

The restaurant company, with brands including Bob Evans and Country Creek said the change will take place immediately, and that CFO Mark Hood and president of the Bob Evans Food business Mike Townsley have both been appointed to the office of interim CEO.

Davis has also given up his position as director of the company, but will remain with Bob Evans until the end of the year in order to help with the transition period.

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The management change comes as Bob Evans is working to improve its performance, the Associated Press reports.

Separately, TheStreet Ratings team rates BOB EVANS FARMS as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate BOB EVANS FARMS (BOBE) a BUY. This is driven by some important positives, 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 lackluster performance in the stock itself."

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 ($1.93 versus $1.18).
  • 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 -17.67%.
  • 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.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Hotels, Restaurants & Leisure industry and the overall market, BOB EVANS FARMS's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • You can view the full analysis from the report here: BOBE Ratings Report

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