Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK ( TheStreet) -- Patriot Transportation Holdings (Nasdaq: PATR) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including poor profit margins and relatively poor performance when compared with the S&P 500 during the past year.
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- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Road & Rail industry average. The net income increased by 12.8% when compared to the same quarter one year prior, going from $2.38 million to $2.68 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 4.9%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- PATRIOT TRANSN HOLDING INC has improved earnings per share by 12.0% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, PATRIOT TRANSN HOLDING INC's EPS of $0.75 remained unchanged from the prior years' EPS of $0.75. This year, the market expects an improvement in earnings ($0.86 versus $0.75).
- In its most recent trading session, PATR has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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, implying reduced upside potential.
- The gross profit margin for PATRIOT TRANSN HOLDING INC is rather low; currently it is at 24.50%. Regardless of PATR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PATR's net profit margin of 8.10% is significantly lower than the same period one year prior.
-- Written by a member of TheStreet Ratings Staff