1-Star Stocks Poised to Plunge: Pier 1 Imports?

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, home furnishings retailer Pier 1 Imports (NYS: PIR) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Pier 1's business and see what CAPS investors are saying about the stock right now.

Pier 1facts

Headquarters (founded)Fort Worth, Texas (1970)
Market Cap$1.8 billion
IndustryHome furnishing retail
Trailing-12-Month Revenue$1.6 billion
ManagementCEO Alexander Smith (since 2007)
CFO Charles Turner (since 1999)
Return on Equity (average, past 3 years)31.2%
Cash/Debt$217.9 million / $9.5 million
Dividend Yield1%
CompetitorsBed Bath & Beyond
Euromarket Designs
Inter IKEA Systems

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 54% of the 573 members who have rated Pier 1 believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, jed71, succinctly summed up the bear case for our community:

I honestly don't have a problem with [Pier 1], but label me a skeptic of their business model and valuation. I guess I just question the run up of [Pier 1] from a penny stock in 2009 to the current valuation of ~$16. I have thought of them as a fad retailer on their way out for a number of years but the stock price seems to continue to defy gravity. I don't know anyone who shops their stores anymore, and I just can't see the new generation of women shoppers buying home decorative items from the stores. Their demographic is getting older, and they haven't really made a huge effort to reach the younger generation of customers.

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The article 1-Star Stocks Poised to Plunge: Pier 1 Imports? originally appeared on Fool.com.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Bed Bath & Beyond. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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