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, increase in stock price during the past year 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:
- PACR 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. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.17, which illustrates the ability to avoid short-term cash problems.
- PACR, with its decline in revenue, underperformed when compared the industry average of 6.7%. Since the same quarter one year prior, revenues slightly dropped by 4.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The gross profit margin for PACER INTERNATIONAL INC is currently extremely low, coming in at 10.50%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.40% trails that of the industry average.
- Net operating cash flow has significantly decreased to -$7.20 million or 201.40% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Pacer International, Inc., together with its subsidiaries, provides asset-light transportation and logistics services primarily in North America, Asia, Europe, Australia, South America, and Africa. It operates in two segments, Intermodal and Logistics. The company has a P/E ratio of 17.4, equal to the average transportation industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Pacer International has a market cap of $151.6 million and is part of the
industry. Shares are down 16.4% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet Ratings Staff