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Hawaiian Holdings Inc. Stock Downgraded (HA)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK (TheStreet) -- Hawaiian Holdings (Nasdaq:HA) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its robust revenue growth -- not just in the most recent periods but in previous quarters as well. At the same time, however, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 15.9%. Since the same quarter one year prior, revenues rose by 15.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • HAWAIIAN HOLDINGS INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HAWAIIAN HOLDINGS INC turned its bottom line around by earning $1.00 versus -$0.07 in the prior year. This year, the market expects an improvement in earnings ($1.35 versus $1.00).
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Airlines industry average, but is less than that of the S&P 500. The net income has significantly decreased by 116.3% when compared to the same quarter one year ago, falling from $20.92 million to -$3.41 million.
  • In its most recent trading session, HA has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The gross profit margin for HAWAIIAN HOLDINGS INC is rather low; currently it is at 21.40%. It has decreased from the same quarter the previous year.
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Hawaiian Holdings, Inc., through its subsidiary, Hawaiian Airlines, Inc., engages in the scheduled air transportation of passengers and cargo. The company has a P/E ratio of 4.4, below the S&P 500 P/E ratio of 17.7. Hawaiian has a market cap of $336.1 million and is part of the services sector and transportation industry. Shares are down 0.5% year to date as of the close of trading on Wednesday.

You can view the full Hawaiian Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

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