NEW YORK ( TheStreet) -- Saia (Nasdaq: SAIA) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 59.10% to $11.71 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 30.84%.
  • The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.08, which illustrates the ability to avoid short-term cash problems.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 16.0%. Since the same quarter one year prior, revenues rose by 14.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 69.6% when compared to the same quarter one year prior, rising from $1.98 million to $3.36 million.
  • SAIA INC reported significant earnings per share improvement 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 two years. We feel that this trend should continue. During the past fiscal year, SAIA INC turned its bottom line around by earning $0.11 versus -$0.67 in the prior year. This year, the market expects an improvement in earnings ($0.77 versus $0.11).

Saia, Inc., an asset-based trucking company, provides transportation and supply chain solutions primarily to the retail, chemical, and manufacturing industries in the United States. The company has a P/E ratio of 43.6, below the average transportation industry P/E ratio of 44.8 and above the S&P 500 P/E ratio of 17.7. Saia has a market cap of $257 million and is part of the services sector and transportation industry. Shares are down 5.1% year to date as of the close of trading on Thursday.

You can view the full Saia Ratings Report or get investment ideas from our investment research center.
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