J.Crew's stock is performing well and the financial analysts are loving it! Over at TheStreet (click here), they share the following insight:
Southwest, J.Crew Lead High-Flying StocksWhat are your thoughts on the article? Disagree or agree with any of the points made? Do you think J.Crew should be rated as a "buy"? Do you think J.Crew has "outmaneuvered competitors"?
By Jake Lynch
December 14, 2009
J.Crew Group(JCG Quote) rose 2% to $45.07. The clothing retailer's shares climbed on news that November retail sales increased 1.3%, twice as much as expected.
Snapshot: Third-quarter profit more than doubled to $44 million, or 67 cents a share, as revenue increased 14% to $414 million. J.Crew's gross margin widened from 45% to 48%, and its operating margin doubled from 9% to 18%. The company has $247 million of cash and $99 million of debt. Over a three-year period, J.Crew has grown earnings per share 84% annually, on average.
Our take: We rate J.Crew "buy." J.Crew outmaneuvered competitors during the recession and took steps to improve its balance sheet, evident in its $147 million of net cash. The stock has climbed 30% during the past three months. It's more expensive than the average specialty retailer based on all of our valuation measures. The premium is justified by growth expectations.