NEW YORK ( TheStreet) -- Saia (Nasdaq: SAIA) has been downgraded by TheStreet Ratings from buy to hold. 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 and revenue growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins. Highlights from the ratings report include:
- 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. This trend suggests that the performance of the business is improving. 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 ($0.71 versus $0.11).
- 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.
- The gross profit margin for SAIA INC is currently extremely low, coming in at 6.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.30% significantly trails the industry average.
- In its most recent trading session, SAIA has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.