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) -- Atlas Air Worldwide Holdings (Nasdaq: AAWW) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and attractive valuation levels. 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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- The revenue growth came in higher than the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 16.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Even though the current debt-to-equity ratio is 1.02, it is still below the industry average, suggesting that this level of debt is acceptable within the Air Freight & Logistics industry. Despite the fact that AAWW's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.67 is high and demonstrates strong liquidity.
- AAWW has underperformed the S&P 500 Index, declining 18.54% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The gross profit margin for ATLAS AIR WORLDWIDE HLDG INC is currently lower than what is desirable, coming in at 28.90%. Regardless of AAWW's low profit margin, it has managed to increase from the same period last year.
-- Written by a member of TheStreet Ratings Staff