NEW YORK (TheStreet) -- Roadrunner Transportation (RRTS) - Get Report fell 13.2% to $22.32 Thursday follow an earnings report that failed to meet analyst expectations for earnings.

For the fourth quarter Roadrunner posted earnings of 29 cents a share. Capital IQ Consensus Estimate called for earnings of 32 cents a share for the quarter, which the company missed by 3 cents. Roadrunner reported earnings of $337 million for the quarter that ended in December. Analysts estimated revenue of $110.4 million for the quarter.

Looking to the first quarter, Roadrunner expects earnings between 27 cents and 30 cents a share, compared to analyst estimates of 33 cents a share.

Following the earnings report analyst firm Raymond James downgraded Roadrunner to "market perform" from its previous "strong buy."

Must read: Oversold Conditions For Roadrunner Transportation Systems (RRTS)

TST Recommends

TheStreet Ratings team rates ROADRUNNER TRANS SVCS HLDGS as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate ROADRUNNER TRANS SVCS HLDGS (RRTS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. 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, growth in earnings per share, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 5.1%. Since the same quarter one year prior, revenues rose by 30.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.42, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, RRTS has a quick ratio of 1.66, which demonstrates the ability of the company to cover short-term liquidity needs.
  • ROADRUNNER TRANS SVCS HLDGS has improved earnings per share by 12.9% 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, ROADRUNNER TRANS SVCS HLDGS increased its bottom line by earning $1.17 versus $0.83 in the prior year. This year, the market expects an improvement in earnings ($1.34 versus $1.17).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Road & Rail industry average. The net income increased by 34.0% when compared to the same quarter one year prior, rising from $9.87 million to $13.23 million.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 35.91% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.