NEW YORK ( TheStreet) -- Standard Parking Corporation (Nasdaq: STAN) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally poor debt management, weak operating cash flow and poor profit margins. Highlights from the ratings report include:
- The debt-to-equity ratio is very high at 2.65 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, STAN maintains a poor quick ratio of 0.70, which illustrates the inability to avoid short-term cash problems.
- Net operating cash flow has decreased to $3.77 million or 46.04% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- 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. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- STANDARD PARKING CORP has improved earnings per share by 38.1% 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, STANDARD PARKING CORP increased its bottom line by earning $1.05 versus $0.90 in the prior year. This year, the market expects an improvement in earnings ($1.26 versus $1.05).
- STAN's revenue growth has slightly outpaced the industry average of 1.1%. Since the same quarter one year prior, revenues slightly increased by 3.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.