NEW YORK ( TheStreet) -- WCA Waste Corporation (Nasdaq: WCAA) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and solid stock price performance. 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:
- The revenue growth came in higher than the industry average of 1.9%. Since the same quarter one year prior, revenues rose by 25.5%. 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.
- Compared to its closing price of one year ago, WCAA's share price has jumped by 35.41%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- WCA WASTE CORP's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, WCA WASTE CORP continued to lose money by earning -$0.14 versus -$0.20 in the prior year. This year, the market expects an improvement in earnings (-$0.04 versus -$0.14).
- The gross profit margin for WCA WASTE CORP is currently lower than what is desirable, coming in at 28.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.70% trails that of the industry average.
- 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 Commercial Services & Supplies industry. The net income has significantly decreased by 33.1% when compared to the same quarter one year ago, falling from $0.78 million to $0.52 million.