In recent weeks, the coverage of department store chain J C Penney Company Inc. (NYSE:JCP) has been decidedly optimistic. That’s a huge change from the past five years. During that time, the market slammed JCP stock and sent it more than 80% lower. Part of the reason many analysts are interested in JCPenney is the fact that the share price has fallen so far, giving the company a massive upside if it does manage to turn things around.

Despite JCPenney’s better-than-expected third-quarter results, I think JCP stock price has further to fall in the year ahead. I wouldn’t be surprised if the company eventually files for bankruptcy.

JCP Is Lacking Luster

JCPenney CEO Marvin Ellison has done a pretty good job of trying to right the ship and get JCP back into consumers’ good graces. The company has been closing down stores and cutting costs in order to create a more streamlined organization. JCP has also been paying down debt, building out its online offerings and focusing on brands and products that JCP consumers want the most.

While those are all commendable initiatives, I think it’s already too late for JCPenney. No matter what changes are made inside the store, the location will always hold JCP back. The stores are located in middle-class shopping malls which are dying a slow and painful death with each store closure. It’s already a struggle for brick-and-mortar stores to drive traffic to their locations. But being part of a shopping mall is pretty much as bad as it gets . Shoppers simply aren’t visiting malls anymore, and that means a huge source of foot traffic is gone for JCP.

Next there’s the fact that while JCPenney is trying to give customers what they want, the firm still doesn’t offer anything that sets it apart from its peers. Sure, JCP has seen its in-store Sephora boutiques gain momentum and its efforts to expand its appliance offerings are commendable, but those things are available elsewhere, and will probably do very little to encourage customers to visit the store — something that will be necessary to keep the business going.

Apparel Is Problem for JCP

One of the things that JCP has said it will focus on in the quarters to come is its women’s apparel offerings. As fellow InvestorPlace Contributor Lawrence Meyers pointed out, the firm’s mission statement, “Help our customer find what she loves for less time, money and effort,” is the first time we’ve seen JCP focus firmly on women.

In line with the mission statement, JCP has liquidated much of its ladies apparel in order to revamp its offerings. As women’s clothing makes up about a quarter of the firm’s revenue, this isn’t a bad strategy. It’s just coming at a very bad time because Amazon.com Inc. (NASDAQ:AMZN) is also turning its focus to women’s apparel.

That’s a problem for JCP stock. It will make it that much harder for the firm to stoke interest in its new apparel lines.

JCP Stock’s Shaky Situation

Perhaps the biggest issue for JCP stock is that the company simply isn’t financially sound enough to be working on a turn-around plan. Many cheered the company’s Q3 results which showed same-store sales had risen 1.7% from a year earlier. However, that rise was largely due to the liquidation of the women’s apparel inventory. A better gauge of how the business is doing was the firm’s 1.8% revenue drop. Additionally is the fact that the gross margin lost 320 basis points.

Management has issued lackluster guidance for the fourth quarter. Without the one-time sales that JCP enjoyed in the third quarter, I think a disappointing Q4 is likely. JCP stock carries a worrisome $4.5 billion worth of debt and the firm’s long-term business plan is flawed. Unlike some of its peers, JCP simply doesn’t have the financial power to strong-arm itself back into consumers’ hearts.

Bottom Line on JCP Stock

Over the next year, we’re likely to see JCP stock making massive swings as the firm continues to try to shore up its business. So, there’s definitely a chance to make money in there somewhere but it’s a risky choice.

Overall, JCP’s business is damaged beyond repair and I don’t see the company overcoming the shift toward online shopping.

As of this writing, Laura Hoy was long AMZN.