NEW YORK ( TheStreet) -- Quality Distribution (Nasdaq: QLTY) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and poor profit margins. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 19.1%. Since the same quarter one year prior, revenues slightly increased by 9.6%. 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.
- Compared to its closing price of one year ago, QLTY's share price has jumped by 105.39%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in QLTY do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- QUALITY DISTRIBUTION INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, QUALITY DISTRIBUTION INC continued to lose money by earning -$0.36 versus -$9.32 in the prior year. This year, the market expects an improvement in earnings ($0.55 versus -$0.36).
- The gross profit margin for QUALITY DISTRIBUTION INC is currently extremely low, coming in at 11.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -6.40% is significantly below that of the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Road & Rail industry. The net income has significantly decreased by 333.8% when compared to the same quarter one year ago, falling from $4.57 million to -$10.68 million.