NEW YORK ( TheStreet) -- US Concrete (Nasdaq: USCR) has been upgraded by TheStreet Ratings from sell to hold. 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 and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 12.1%. Since the same quarter one year prior, revenues rose by 17.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.07, which illustrates the ability to avoid short-term cash problems.
- U S CONCRETE INC reported significant earnings per share improvement 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, U S CONCRETE INC swung to a loss, reporting -$1.12 versus $3.77 in the prior year. This year, the market expects an improvement in earnings (-$0.88 versus -$1.12).
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Construction Materials industry and the overall market, U S CONCRETE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for U S CONCRETE INC is currently extremely low, coming in at 11.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.60% trails that of the industry average.
-- Written by a member of TheStreet RatingsStaff