NEW YORK ( TheStreet) -- USA Truck (Nasdaq: USAK) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share. Highlights from the ratings report include:
- 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 Road & Rail industry. The net income has significantly decreased by 33.5% when compared to the same quarter one year ago, falling from $0.90 million to $0.60 million.
- The gross profit margin for USA TRUCK INC is currently extremely low, coming in at 9.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.40% significantly trails the industry average.
- Net operating cash flow has significantly decreased to $4.83 million or 76.24% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 48.22%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 33.33% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- USA TRUCK INC's earnings per share declined by 33.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, USA TRUCK INC continued to lose money by earning -$0.31 versus -$0.69 in the prior year. For the next year, the market is expecting a contraction of 25.8% in earnings (-$0.39 versus -$0.31).