Rite Aid (RAD) Stock Advances After Posting July Same Store Sales Growth
By U-Jin Lee Follow | 07/30/15 - 12:58 PM EDT
NEW YORK (TheStreet) -- Rite Aid (RAD - Get Report) shares are gaining by 0.45% to $8.91 on Thursday after the pharmacy retail chain said earlier today that July same stores sales increased 2.4% year-over-year.
Pharmacy same stores sales went up by 3.4% and prescription count also increased 0.7% from the same period a year ago, the company noted.
Additionally, total drugstore revenue rose to $2.016 billion, up 2.1% from $1.975 billion in the same period last year.
Based in Camp Hill, PA, Rite Aid operates a chain of retail drugstores in the U.S.
Separately, TheStreet Ratings team rates RITE AID CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate RITE AID CORP (RAD) 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 notable return on equity, revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
?Compared to other companies in the Food & Staples Retailing industry and the overall market, RITE AID CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
?RAD's revenue growth has slightly outpaced the industry average of 3.7%. Since the same quarter one year prior, revenues slightly increased by 2.8%. 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.
?Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
?The debt-to-equity ratio is very high at 47.37 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, RAD's quick ratio is somewhat strong at 1.20, demonstrating the ability to handle short-term liquidity needs.
?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 & Staples Retailing industry. The net income has significantly decreased by 54.5% when compared to the same quarter one year ago, falling from $41.45 million to $18.84 million.
?You can view the full analysis from the report here: RAD Ratings Report
