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Why Ruth's Hospitality (RUTH) Is Up Today

Tickers in this article: RUTH

NEW YORK (TheStreet) -- Ruth's Hospitality gained 10.2% to $13.58 Friday after beating analyst's expectations for earnings in its fourth quarter.

In its fourth quarter the restaurant operator reported earnings of 21 cents a share, beating the Capital IQ Consensus Estimate of 18 cents a share by 3 cents. Revenue fell 4.8% from the year-ago quarter to $108.8 million. Analysts expected revenue of $111.88 million for the quarter.

Ruth's Hospitality said restaurant sales decreased 3.6% in the fourth quarter when compared to the year-ago quarter. Sales increased 2.5% for the year, however. Both the fourth quarter of 2012 and the full-year 2012 had one more operating week than 2013.

Must read: Income Inequality: 7 Restaurant Stocks With Upscale Customers

TheStreet Ratings team rates RUTHS HOSPITALITY GROUP INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate RUTHS HOSPITALITY GROUP INC (RUTH) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, notable return on equity, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • RUTH's revenue growth has slightly outpaced the industry average of 4.2%. Since the same quarter one year prior, revenues slightly increased by 5.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Powered by its strong earnings growth of 300.00% and other important driving factors, this stock has surged by 61.07% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, RUTH should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Hotels, Restaurants & Leisure industry and the overall market, RUTHS HOSPITALITY GROUP INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 259.5% when compared to the same quarter one year prior, rising from $0.80 million to $2.89 million.
  • You can view the full analysis from the report here: RUTH Ratings Report