NEW YORK (TheStreet) -- Heartland Express (Nasdaq:HTLD) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, poor profit margins and weak operating cash flow. Highlights from the ratings report include:
- HEARTLAND EXPRESS INC has improved earnings per share by 38.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, HEARTLAND EXPRESS INC increased its bottom line by earning $0.68 versus $0.62 in the prior year. This year, the market expects an improvement in earnings ($0.82 versus $0.68).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Road & Rail industry average. The net income increased by 35.3% when compared to the same quarter one year prior, rising from $16.65 million to $22.53 million.
- Net operating cash flow has declined marginally to $17.84 million or 7.19% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- HTLD has underperformed the S&P 500 Index, declining 14.67% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
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