The firm said it raised its rating on the truckload carrier business based on a valuation call, strong supply and demand in the industry, and a lack of competition in the one-way long-haul market.
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"We rate CELADON GROUP INC (CGI) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
Separately, TheStreet Ratings team rates CELADON GROUP INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
- The revenue growth came in higher than the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 29.1%. 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.
- The gross profit margin for CELADON GROUP INC is currently extremely low, coming in at 10.53%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.80% significantly trails the industry average.
- Net operating cash flow has significantly decreased to $4.64 million or 72.93% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: CGI Ratings Report
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