![]() JCP has not shown favorable earnings consistency over the last five years. The beta of 1.01 implies same volatility of the stock with respect to the S&P 500. The stock is currently trading below its intrinsic value of $30.57, this suggests that the stock is currently undervalued at these levels. The stock trades at a lower P/S ratio than main competitors. The quarterly revenue growth of the company is also negative, but competitors’ growth is not much better either. JCP’s head to head comparison to its main competitors show that the company has lowest gross margin, and lower than the industry average moreover, the company’s operating margin is negative. JCP's current Price/Sales of 0.15 is below the average of its industry of 2.89, depicting how low the opinion of marketing participants in JCP is. Over the last five years, the company’s shares have traded in the range of 4.67x to 51.07x trailing 12-month earnings. JCP PE current ratio is negative due to the prolonged negative earnings per share. In terms of efficiency, the inventory turnover ratio of 2.81 is at much worse levels than the average for the industry of 11.89 however, the asset turnover ratio of 1.08 is leveled with the industry average of 1.06. Moreover, the interest coverage ratio of 0 is at worse levels than the industry average of 7.75. The long term debt to equity ratio of 212.11 is at worse levels than the average for the industry of 59.32. The quick ratio of 0.53 is worse than the average for the industry of 0.98. The current ratio of the company is 1.42, and the industry average ratio is 1.16. The financial strength indicators of the company are at alarming levels. JCP forecasted EPS for the third quarter of fiscal 2014 ending October are from -$2.17 to -66 cents, compared to -56 cents in the third quarter of fiscal 2013. Operating margin was -14.8% compared to -6.1% for the same quarter last year. Selling, general and administrative expenses decreased $24 million, or 2.3% in comparison to the same quarter last year, and it is a result of the cost saving initiative of the company. The decrease was primarily due to change in the merchandise sales mix, which includes higher level of clearance merchandise sales during this quarter. Gross margin was 29.6% in comparison to 33.2% for the same quarter last year. What is more of a concern is that out of the $359 decline, $356 is comparable store sales decrease. ![]() Revenues for the third quarter were $2,663 million, down from $3,022 million for the same quarter last year. That's down from loss of $147 million or 67 cents earnings per share for the same quarter last year. The company reported a loss of $586 million, or $2.66 earnings per share, for the second quarter of fiscal year 2014 ending August 3.
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