The New Hyde Park, NY-based company manufactures, markets, distributes and sells organic and natural products.
"Despite some more significant near-term challenges in the U.S., HAIN's broad multi-channel and multi-brand exposure at scale remains a key differentiator and competitive strength within natural and organic foods," the firm said in an analyst note.
However, the company's shares have declined by about 25% since its early November quarter one call and headwinds in the U.S. grocery and tea businesses have been well-publicized, the firm noted.
Canaccord Genuity believes a quarter two shortfall and guidance cut doesn't come as a big surprise.
Shares of Hain Celestial are gaining by 1.73% to $37.05 at the start of trading on Tuesday.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate HAIN CELESTIAL GROUP INC as a Buy with a ratings score of B-. 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, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, reasonable valuation levels and good cash flow from operations. We feel its 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:
- HAIN's revenue growth has slightly outpaced the industry average of 2.3%. Since the same quarter one year prior, revenues slightly increased by 6.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.27, which illustrates the ability to avoid short-term cash problems.
- HAIN CELESTIAL GROUP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HAIN CELESTIAL GROUP INC increased its bottom line by earning $1.62 versus $1.42 in the prior year. This year, the market expects an improvement in earnings ($2.14 versus $1.62).
- Net operating cash flow has significantly increased by 121.30% to $5.79 million when compared to the same quarter last year. In addition, HAIN CELESTIAL GROUP INC has also vastly surpassed the industry average cash flow growth rate of -19.01%.
- You can view the full analysis from the report here: HAIN