NEW YORK ( TheStreet) -- Universal Truckload Services (Nasdaq: UACL) has been downgraded by TheStreet Ratings from buy to hold. 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 and revenue growth. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- UNIVERSAL TRUCKLOAD SERVICES has improved earnings per share by 21.1% 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. This trend suggests that the performance of the business is improving. During the past fiscal year, UNIVERSAL TRUCKLOAD SERVICES increased its bottom line by earning $1.02 versus $0.80 in the prior year. This year, the market expects an improvement in earnings ($1.20 versus $1.02).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Road & Rail industry average. The net income increased by 24.1% when compared to the same quarter one year prior, going from $2.90 million to $3.60 million.
- UACL has underperformed the S&P 500 Index, declining 12.97% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- The gross profit margin for UNIVERSAL TRUCKLOAD SERVICES is rather low; currently it is at 20.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.00% significantly trails the industry average.
-- Written by a member of TheStreet Ratings Staff