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Cabela's Down 24% in 3 Months: What's Hurting the Stock?
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Cabela's Incorporated seems like a ‘touch-me-not’ stock for quite some time now. Shares of this Zacks Rank #5 (Strong Sell) company have not only underperformed the Zacks categorized Retail – Miscellaneous/Diversified industry, but also the broader sector. Over the past three months, the stock declined nearly 24%, while the industry fell 6.7%. On the other hand, the broader Retail-Wholesale sector of which they are part of, gained 2.2% during the said time period.
A glance at Cabela's trailing price-to-earnings (P/E) ratio tells us that the stock looks pretty overvalued when compared with the industry. The stock has a trailing 12-month P/E ratio of 18.22, which is above its median level of 17.61, but still below the high level of 22.63 scaled in the past one year. On the contrary, the trailing 12-month P/E ratio for the industry is 17.32.
Cabela's has delivered negative earnings surprises of 3.3%, 33.8% and 13.9% in the second, third and fourth quarters of 2016. Further, it posted an average miss of 8.7% in the past four quarters. Recently, the company recorded dismal fourth-quarter results, wherein both the top and bottom lines missed estimates, and also declined year over year. Results were primarily hurt by poor store traffic, dismal comparable store sales, along with a sharp decline in merchandise sales. (Read more: Cabela's Lags Q4 Earnings & Revenues; Stock Down)
Consequently, the estimates have witnessed a downward revision in the past 30 days. The Zacks Consensus Estimate of $2.84 and $2.97 for 2017 and 2018 has declined by 38 cents and 28 cents, respectively, during the same period.
Soft economic recovery, deceleration in the sale of sporting goods and stiff competition from both brick & mortar and e-commerce, affect the company’s financial performance.
Notably, Cabela's has accepted the buyout offer of Bass Pro Shops, in an all-cash deal, valued at $5.5 billion. Going forward, this acquisition, which is likely to conclude in the first half of 2017, will result in a giant entity that will control over 20% of the U.S. hunting, camping, and fishing market. Moreover, the deal is anticipated to aid the combined entity in generating significant revenues and cost savings. However, the Federal regulators have raised questions over the deal.
Only time will tell whether this buyout, along with the company’s cost-saving initiatives, will spark a turnaround for Cabela's.
Key Picks
Investors looking for better-ranked stocks in the Retail-Wholesale sector may select The Children's Place, Inc. (PLCE - Free Report) , Big 5 Sporting Goods Corporation (BGFV - Free Report) and MarineMax, Inc. (HZO - Free Report) .
The Children's Place, with a long-term earnings growth rate of 10.3%, has surged 45.8% in the past one year. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Big 5 Sporting, with a long-term earnings growth rate of 12%, has a Zacks Rank #2 (Buy). The stock has also gained 28.6% in the past one year.
MarineMax, a Zacks Rank #2 stock, has posted an impressive average beat of 131.2% in the trailing four quarters. In addition, the stock rose 19.5% in the past one year.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>
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Cabela's Down 24% in 3 Months: What's Hurting the Stock?
Cabela's Incorporated seems like a ‘touch-me-not’ stock for quite some time now. Shares of this Zacks Rank #5 (Strong Sell) company have not only underperformed the Zacks categorized Retail – Miscellaneous/Diversified industry, but also the broader sector. Over the past three months, the stock declined nearly 24%, while the industry fell 6.7%. On the other hand, the broader Retail-Wholesale sector of which they are part of, gained 2.2% during the said time period.
A glance at Cabela's trailing price-to-earnings (P/E) ratio tells us that the stock looks pretty overvalued when compared with the industry. The stock has a trailing 12-month P/E ratio of 18.22, which is above its median level of 17.61, but still below the high level of 22.63 scaled in the past one year. On the contrary, the trailing 12-month P/E ratio for the industry is 17.32.
Cabela's has delivered negative earnings surprises of 3.3%, 33.8% and 13.9% in the second, third and fourth quarters of 2016. Further, it posted an average miss of 8.7% in the past four quarters. Recently, the company recorded dismal fourth-quarter results, wherein both the top and bottom lines missed estimates, and also declined year over year. Results were primarily hurt by poor store traffic, dismal comparable store sales, along with a sharp decline in merchandise sales. (Read more: Cabela's Lags Q4 Earnings & Revenues; Stock Down)
Cabela's Inc Price and Consensus
Cabela's Inc Price and Consensus | Cabela's Inc Quote
Consequently, the estimates have witnessed a downward revision in the past 30 days. The Zacks Consensus Estimate of $2.84 and $2.97 for 2017 and 2018 has declined by 38 cents and 28 cents, respectively, during the same period.
Soft economic recovery, deceleration in the sale of sporting goods and stiff competition from both brick & mortar and e-commerce, affect the company’s financial performance.
Notably, Cabela's has accepted the buyout offer of Bass Pro Shops, in an all-cash deal, valued at $5.5 billion. Going forward, this acquisition, which is likely to conclude in the first half of 2017, will result in a giant entity that will control over 20% of the U.S. hunting, camping, and fishing market. Moreover, the deal is anticipated to aid the combined entity in generating significant revenues and cost savings. However, the Federal regulators have raised questions over the deal.
Only time will tell whether this buyout, along with the company’s cost-saving initiatives, will spark a turnaround for Cabela's.
Key Picks
Investors looking for better-ranked stocks in the Retail-Wholesale sector may select The Children's Place, Inc. (PLCE - Free Report) , Big 5 Sporting Goods Corporation (BGFV - Free Report) and MarineMax, Inc. (HZO - Free Report) .
The Children's Place, with a long-term earnings growth rate of 10.3%, has surged 45.8% in the past one year. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Big 5 Sporting, with a long-term earnings growth rate of 12%, has a Zacks Rank #2 (Buy). The stock has also gained 28.6% in the past one year.
MarineMax, a Zacks Rank #2 stock, has posted an impressive average beat of 131.2% in the trailing four quarters. In addition, the stock rose 19.5% in the past one year.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>