The shares of Office Depot, Inc. (NASDAQ:ODP) and Array BioPharma Inc. (NASDAQ:ARRY) were among the active stocks of the last trading sessions. Office Depot, Inc. (NASDAQ:ODP) declined to -1.33% closing at the price of $2.96 whereas the shares of Array BioPharma Inc. (NASDAQ:ARRY) declined -7.17% with the decrease of -1.08 points closing at the price of $13.98. Office Depot, Inc. has currently increase 48% in its stock over the period of 6-months while its rival Array BioPharma Inc. subtracted -2.85% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Office Depot, Inc. (NASDAQ:ODP) is 3.1% while the ROI of Array BioPharma Inc. (NASDAQ:ARRY) is -41.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, ODP’s EBITDA Margin is 5.54 whereas ARRY’s is -22.34.
Both the profitability ratios suggest that Office Depot, Inc. (NASDAQ:ODP) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Office Depot, Inc. (NASDAQ:ODP) reported $0.05/share EPS for the previous quarter where analysts were predicting an EPS to be $0.04/share Thus beating the analyst Estimates with a Surprise Factor of 25 Percent. While, Array BioPharma Inc. (NASDAQ:ARRY) reported EPS of $-0.25/share in the last quarter. The analysts projected EPS of $-0.24/share depicting a Surprise of -4.2 Percent.
Taking a look at Earnings per Share, Office Depot, Inc. tends to be beating the analyst estimates more than Array BioPharma Inc.. so ODP is more profitable than ARRY.
Technical Analysis of Office Depot, Inc. & Array BioPharma Inc.
Moving average convergence divergence (MACD) shows that Office Depot, Inc. (NASDAQ:ODP) is on a PRICE RELATIVITY trend While Array BioPharma Inc. (NASDAQ:ARRY) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Office Depot, Inc. was in BEARISH territory and Array BioPharma Inc. was in BEARISH territory.
ODP’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While ARRY’s candle is BEARISH with HIGH.
EPS Growth Rate: ODP’s -2.2% versus ARRY’s 10%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Office Depot, Inc. (NASDAQ:ODP) is predicted at -2.2% while Array BioPharma Inc. (NASDAQ:ARRY) stands at 10%. These numbers suggest that ARRY is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of ODP stands at 1.4 while ARRY is at 4.7 whereas the debt ratio of the prior is 0.82 while the debt ratio of the later is 0.51.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 3 for ODP and 1.5 for ARRY which means ODP has Hold rating whereas ARRY has Buy rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for ODP is $3.13 which is 5.43% of its current price while ARRY has price target of 24.63 which is 43.24% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
ODP currently has price to earning P/E ratio of 50.17 whereas ARRY has 0 while the forward P/E ratio for the prior stands at 7.91 and for the later it depicts the value of 0.
The price to Book P/B for ODP is 0.76, Price to Sale is at 0.16 and for ARRY these ratios stand at 13.44 and 18.45.