NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- RAIL's very impressive revenue growth greatly exceeded the industry average of 16.7%. Since the same quarter one year prior, revenues leaped by 203.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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 1.62, which demonstrates the ability of the company to cover short-term liquidity needs.
- FREIGHTCAR AMERICA INC reported significant earnings per share improvement 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 two years. We feel that this trend should continue. During the past fiscal year, FREIGHTCAR AMERICA INC turned its bottom line around by earning $0.42 versus -$1.07 in the prior year. This year, the market expects an improvement in earnings ($2.04 versus $0.42).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 854.6% when compared to the same quarter one year prior, rising from -$1.29 million to $9.73 million.
- Net operating cash flow has significantly increased by 396.56% to $32.42 million when compared to the same quarter last year. In addition, FREIGHTCAR AMERICA INC has also vastly surpassed the industry average cash flow growth rate of -66.43%.
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 15.7, equal to the average transportation industry P/E ratio and below the S&P 500 P/E ratio of 17.7. FreightCar America has a market cap of $249.6 million and is part of the
industry. Shares are down 0.4% year to date as of the close of trading on Monday.
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-- Written by a member of TheStreet Ratings Staff
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.