Needham & Company Reiterates a 'Buy' on bebe stores (BEBE); Margin Expansion Just Beginning as October SSS Accelerated
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Price: $0.70 --0%
Rating Summary:
3 Buy, 5 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 16 | New: 37
Rating Summary:
3 Buy, 5 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 16 | New: 37
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Needham & Company reiterates a 'Buy' on bebe stores, inc. (NASDAQ: BEBE) price target of $9.00.
Needham analyst says, "At~14x our CY12 EPS estimate of $0.31, (ex ~$3.00 in cash), BEBE is trading in-line with the sector average of ~14x. We believe BEBE reached trough earnings of $0.01 and OM deterioration (0.9%) in CY09 down from peak of +22% in CY1999 and is on the way towards sales acceleration and margin expansion due to an improved product offering and better inventory control as evidenced by CY10 EPS of $0.05 and OMS of 1.1%. We are forecasting OMS of 3.5% in CY11 with acceleration to 8.2% in CY12. If sales trends accelerate and BEBE can return to +LDD% OMS, the implied earnings power is $0.38 to $0.46 as every 100 bps of OM improvement contributes $0.04 to EPS. Given that BEBE is a turnaround story, we think fair valuation is ~15x, or the low-end of potential EPS of $0.38 plus the ~$3 in cash per share or ~$9."
"We are adjusting our F2Q12, FY12, and CY12 EPS estimates to $0.08, $0.21 and $0.31, respectively, from $0.07, $0.18 and $0.29. We are adjusting our F1Q13, F2Q13, F3Q13, F4Q13 and FY13, EPS estimates to $0.07, $0.14, $0.05, $0.16 and $0.42, respectively, from $0.03, $0.16, $0.03, $0.20 and $0.42."
For more ratings news on bebe stores, inc. click here and for the rating history of bebe stores, inc. click here.
Shares of bebe stores, inc. closed at $6.85 yesterday.
Needham analyst says, "At~14x our CY12 EPS estimate of $0.31, (ex ~$3.00 in cash), BEBE is trading in-line with the sector average of ~14x. We believe BEBE reached trough earnings of $0.01 and OM deterioration (0.9%) in CY09 down from peak of +22% in CY1999 and is on the way towards sales acceleration and margin expansion due to an improved product offering and better inventory control as evidenced by CY10 EPS of $0.05 and OMS of 1.1%. We are forecasting OMS of 3.5% in CY11 with acceleration to 8.2% in CY12. If sales trends accelerate and BEBE can return to +LDD% OMS, the implied earnings power is $0.38 to $0.46 as every 100 bps of OM improvement contributes $0.04 to EPS. Given that BEBE is a turnaround story, we think fair valuation is ~15x, or the low-end of potential EPS of $0.38 plus the ~$3 in cash per share or ~$9."
"We are adjusting our F2Q12, FY12, and CY12 EPS estimates to $0.08, $0.21 and $0.31, respectively, from $0.07, $0.18 and $0.29. We are adjusting our F1Q13, F2Q13, F3Q13, F4Q13 and FY13, EPS estimates to $0.07, $0.14, $0.05, $0.16 and $0.42, respectively, from $0.03, $0.16, $0.03, $0.20 and $0.42."
For more ratings news on bebe stores, inc. click here and for the rating history of bebe stores, inc. click here.
Shares of bebe stores, inc. closed at $6.85 yesterday.
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