NEW YORK ( TheStreet) -- Hub Group (Nasdaq: HUBG) 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, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • HUBG's very impressive revenue growth greatly exceeded the industry average of 9.3%. Since the same quarter one year prior, revenues leaped by 58.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • HUBG's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.41, which illustrates the ability to avoid short-term cash problems.
  • HUB GROUP INC has improved earnings per share by 29.4% 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, HUB GROUP INC increased its bottom line by earning $1.17 versus $0.91 in the prior year. This year, the market expects an improvement in earnings ($1.63 versus $1.17).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Air Freight & Logistics industry average. The net income increased by 29.0% when compared to the same quarter one year prior, rising from $12.62 million to $16.28 million.
  • Net operating cash flow has significantly increased by 195.60% to $36.22 million when compared to the same quarter last year. In addition, HUB GROUP INC has also vastly surpassed the industry average cash flow growth rate of 82.60%.

Hub Group, Inc., an asset-light freight transportation management company, provides intermodal, truck brokerage, and logistics services in North America. Its intermodal services include arranging for the movement of customers' freight in containers and trailers over long distances. The company has a P/E ratio of 21.9, below the average transportation industry P/E ratio of 22.2 and above the S&P 500 P/E ratio of 17.7. Hub Group has a market cap of $1.2 billion and is part of the services sector and transportation industry. Shares are down 10.1% year to date as of the close of trading on Wednesday.

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