NEW YORK ( TheStreet) -- Air T (Nasdaq: AIRT) 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, attractive valuation levels, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 9.0%. Since the same quarter one year prior, revenues rose by 26.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the 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. To add to this, AIRT has a quick ratio of 2.09, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to -$2.16 million or 47.33% when compared to the same quarter last year. Despite an increase in cash flow, AIR T INC's cash flow growth rate is still lower than the industry average growth rate of 67.57%.
- AIR T INC has improved earnings per share by 9.1% 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, AIR T INC reported lower earnings of $0.86 versus $1.54 in the prior year. This year, the market expects an improvement in earnings ($0.90 versus $0.86).