NEW YORK (
-- UTi Worldwide
) has been downgraded by TheStreet Ratings from buy to hold. 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 and impressive record of earnings per share growth. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.
Highlights from the ratings report include:
- Net operating cash flow has decreased to $61.16 million or 10.50% when compared to the same quarter last year. Despite a decrease in cash flow of 10.50%, UTI WORLDWIDE INC is still significantly exceeding the industry average of -80.70%.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Air Freight & Logistics industry and the overall market, UTI WORLDWIDE INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.13, which illustrates the ability to avoid short-term cash problems.
- UTIW's revenue growth has slightly outpaced the industry average of 7.6%. Since the same quarter one year prior, revenues rose by 15.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
UTi Worldwide Inc., through its subsidiaries, operates as a supply chain services and solutions company. The company has a P/E ratio of 33.8, above the average transportation industry P/E ratio of 33.2 and above the S&P 500 P/E ratio of 16. UTi Worldwide has a market cap of $1.9 billion and is part of the
industry. Shares are down 11% year to date as of the close of trading on Thursday.
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