NEW YORK ( TheStreet) -- Heartland Express (Nasdaq: HTLD) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, growth in earnings per share and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- HTLD's revenue growth trails the industry average of 16.0%. Since the same quarter one year prior, revenues slightly increased by 1.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- HTLD 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. Along with this, the company maintains a quick ratio of 4.04, which clearly demonstrates the ability to cover short-term cash needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Road & Rail industry and the overall market, HEARTLAND EXPRESS INC's return on equity exceeds that of both the industry average and the S&P 500.
- HEARTLAND EXPRESS INC has improved earnings per share by 17.6% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, HEARTLAND EXPRESS INC increased its bottom line by earning $0.78 versus $0.68 in the prior year. For the next year, the market is expecting a contraction of 1.9% in earnings ($0.77 versus $0.78).
-- Written by a member of TheStreet RatingsStaff