NEW YORK ( TheStreet) -- Air T (Nasdaq: AIRT) 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, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • AIRT's revenue growth has slightly outpaced the industry average of 7.5%. Since the same quarter one year prior, revenues rose by 10.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • AIRT's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.50, which clearly demonstrates the ability to cover short-term cash needs.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Air Freight & Logistics industry. The net income has significantly decreased by 43.8% when compared to the same quarter one year ago, falling from $0.30 million to $0.17 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Air Freight & Logistics industry and the overall market, AIR T INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

Air T, Inc., through its subsidiaries, provides overnight air cargo, ground equipment sales, and ground support services. Its Overnight Air Cargo segment offers small package overnight airfreight delivery services on a contract basis to the air express delivery services industry. The company has a P/E ratio of 9.2, below the average transportation industry P/E ratio of 9.4 and below the S&P 500 P/E ratio of 17.7. Air T has a market cap of $18.8 million and is part of the services sector and transportation industry. Shares are down 19.5% year to date as of the close of trading on Tuesday.

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