NEW YORK ( TheStreet) -- Heartland Express (Nasdaq: HTLD) has been downgraded by TheStreet Ratings from buy 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 notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.
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- Despite its growing revenue, the company underperformed as compared with the industry average of 12.3%. Since the same quarter one year prior, revenues slightly increased by 5.6%. 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 3.71, which clearly demonstrates the ability to cover short-term cash needs.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Road & Rail industry average. The net income increased by 11.5% when compared to the same quarter one year prior, going from $14.88 million to $16.59 million.
- The gross profit margin for HEARTLAND EXPRESS INC is rather low; currently it is at 24.90%. Regardless of HTLD's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 12.30% trails the industry average.
- HTLD has underperformed the S&P 500 Index, declining 12.76% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
-- Written by a member of TheStreet Ratings Staff