NEW YORK ( TheStreet) -- H & E Equipment Services Incorporated (Nasdaq: HEES) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and growth in earnings per share. However, as a counter to these strengths, we find that the company's return on equity has been disappointing. Highlights from the ratings report include:
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Trading Companies & Distributors industry and the overall market, H&E EQUIPMENT SERVICES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Trading Companies & Distributors industry average, but is greater than that of the S&P 500. The net income increased by 79.3% when compared to the same quarter one year prior, rising from -$12.10 million to -$2.51 million.
- H&E EQUIPMENT SERVICES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, H&E EQUIPMENT SERVICES INC reported poor results of -$0.73 versus -$0.35 in the prior year. This year, the market expects an improvement in earnings ($0.08 versus -$0.73).
- HEES's revenue growth trails the industry average of 47.7%. Since the same quarter one year prior, revenues rose by 26.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 80.00% and other important driving factors, this stock has surged by 79.57% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.