NEW YORK ( TheStreet) -- Marten Transport (Nasdaq: MRTN) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- MARTEN TRANSPORT LTD has improved earnings per share by 45.8% 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 two years. We feel that this trend should continue. During the past fiscal year, MARTEN TRANSPORT LTD increased its bottom line by earning $1.11 versus $0.90 in the prior year. This year, the market expects an improvement in earnings ($1.30 versus $1.11).
- 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 47.1% when compared to the same quarter one year prior, rising from $5.21 million to $7.66 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 16.3%. Since the same quarter one year prior, revenues rose by 15.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MRTN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, MRTN has a quick ratio of 1.80, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $25.46 million or 36.82% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -6.00%.