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 buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.
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Highlights from the ratings report include:
- RAIL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, RAIL has a quick ratio of 1.74, which demonstrates the ability of the company to cover short-term liquidity needs.
- RAIL, with its decline in revenue, underperformed when compared the industry average of 12.6%. Since the same quarter one year prior, revenues fell by 37.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for FREIGHTCAR AMERICA INC is currently extremely low, coming in at 8.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.82% trails that of the industry average.
- Net operating cash flow has significantly decreased to $14.47 million or 57.44% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
FreightCar America, Inc., through its subsidiaries, designs, manufactures, and sells railroad freight cars primarily for railroads, shippers, and financial institutions in North America. The company has a P/E ratio of 13.1, below the S&P 500 P/E ratio of 17.7. FreightCar America has a market cap of $251.7 million and is part of the services sector and transportation industry. Shares are down 6.3% year to date as of the close of trading on Thursday.
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-- Written by a member of TheStreet Ratings Staff
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