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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally poor debt management and poor profit margins. Highlights from the ratings report include:
- The debt-to-equity ratio is very high at 2.23 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. To add to this, STAN has a quick ratio of 0.70, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- The gross profit margin for STANDARD PARKING CORP is currently extremely low, coming in at 11.00%. Regardless of STAN's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.10% trails the industry average.
- The net income growth from the same quarter one year ago has exceeded that of the Commercial Services & Supplies industry average, but is less than that of the S&P 500. The net income increased by 32.8% when compared to the same quarter one year prior, rising from $2.85 million to $3.78 million.
- STANDARD PARKING CORP has improved earnings per share by 27.8% 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 ($1.17 versus $1.05).
- STAN's revenue growth has slightly outpaced the industry average of 4.3%. Since the same quarter one year prior, revenues slightly increased by 1.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.