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 (
) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins and feeble growth in its earnings per share.
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Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Road & Rail industry. The net income has significantly decreased by 206.1% when compared to the same quarter one year ago, falling from -$0.64 million to -$1.96 million.
- The gross profit margin for COVENANT TRANSPORTATION GRP is currently extremely low, coming in at 6.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.18% is significantly below that of the industry average.
- COVENANT TRANSPORTATION GRP 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, COVENANT TRANSPORTATION GRP turned its bottom line around by earning $0.42 versus -$0.97 in the prior year. For the next year, the market is expecting a contraction of 30.9% in earnings ($0.29 versus $0.42).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Road & Rail industry and the overall market, COVENANT TRANSPORTATION GRP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
Covenant Transportation Group, Inc., together with its subsidiaries, offers truckload transportation and brokerage services in the continental United States. The company has a P/E ratio of 17.3, below the S&P 500 P/E ratio of 17.7. Covenant Transportation Group has a market cap of $69.2 million and is part of the services sector and transportation industry. Shares are up 0.2% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff
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