NEW YORK ( TheStreet) -- Northwest Pipe Company (Nasdaq: NWPX) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated. Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 18.9%. Since the same quarter one year prior, revenues rose by 49.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- NORTHWEST PIPE CO 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 year. We feel that this trend should continue. During the past fiscal year, NORTHWEST PIPE CO continued to lose money by earning -$0.16 versus -$0.79 in the prior year. This year, the market expects an improvement in earnings ($1.59 versus -$0.16).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Construction & Engineering industry. The net income increased by 484.8% when compared to the same quarter one year prior, rising from -$1.40 million to $5.38 million.
- Powered by its strong earnings growth of 480.00% and other important driving factors, this stock has surged by 48.95% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Construction & Engineering industry and the overall market on the basis of return on equity, NORTHWEST PIPE CO underperformed against that of the industry average and is significantly less than that of the S&P 500.