NEW YORK (TheStreet) -- Shares of UniFirst Corp. (UNF) - Get Report are higher by 1.08% to $108 at the start of trading on Wednesday, following the company's strong 2014 third quarter earnings results which showed a 7.7% increase in net income to $30.9 million, or $1.53 per diluted share, compared to $28.7 million, or $1.43 per diluted share for the year ago period.

The company, which provides workplace uniforms, and protective work wear clothing in the U.S., posted a 4.9% increase in revenue for the most recent quarter to $352.2 million versus $335.8 million from the 2013 third quarter.

UniFirst forecasted its full year 2014 revenue to be between $1.382 billion and $1.387 billion, and full year EPS to be between $5.70 and $5.85 per share.

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Separately, TheStreet Ratings team rates UNIFIRST CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate UNIFIRST CORP (UNF) 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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

  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.0%. Since the same quarter one year prior, revenues slightly increased by 2.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • UNF's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, UNF has a quick ratio of 1.78, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to $40.46 million or 11.31% when compared to the same quarter last year. In addition, UNIFIRST CORP has also modestly surpassed the industry average cash flow growth rate of 4.15%.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • You can view the full analysis from the report here: UNF Ratings Report

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