NEW YORK ( TheStreet) -- Roadrunner Transportation Systems (NYSE: RRTS) 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, impressive record of earnings per share growth, compelling growth in net income, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 12.6%. Since the same quarter one year prior, revenues rose by 38.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ROADRUNNER TRANS SVCS HLDGS reported significant earnings per share improvement 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, ROADRUNNER TRANS SVCS HLDGS increased its bottom line by earning $0.83 versus $0.10 in the prior year. This year, the market expects an improvement in earnings ($1.21 versus $0.83).
- 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 80.3% when compared to the same quarter one year prior, rising from $4.40 million to $7.93 million.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Road & Rail industry and the overall market, ROADRUNNER TRANS SVCS HLDGS's return on equity is significantly below that of the industry average and is below that of the S&P 500.
-- Written by a member of TheStreet RatingsStaff