NEW YORK ( TheStreet) -- Universal Truckload Services (Nasdaq: UACL) 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, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- UACL's revenue growth has slightly outpaced the industry average of 15.0%. Since the same quarter one year prior, revenues rose by 19.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- UACL's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, UACL has a quick ratio of 1.64, which demonstrates the ability of the company to cover short-term liquidity needs.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- UNIVERSAL TRUCKLOAD SERVICES 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, UNIVERSAL TRUCKLOAD SERVICES increased its bottom line by earning $0.80 versus $0.31 in the prior year. This year, the market expects an improvement in earnings ($1.05 versus $0.80).
- 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 85.4% when compared to the same quarter one year prior, rising from $2.93 million to $5.44 million.