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) -- Standard Parking Corporation (Nasdaq: STAN) 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 and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- STAN's very impressive revenue growth greatly exceeded the industry average of 10.3%. Since the same quarter one year prior, revenues leaped by 95.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- STANDARD PARKING CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, STANDARD PARKING CORP reported lower earnings of $0.29 versus $1.11 in the prior year. This year, the market expects an improvement in earnings ($0.78 versus $0.29).
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- Net operating cash flow has declined marginally to -$9.52 million or 4.46% when compared to the same quarter last year. Despite a decrease in cash flow STANDARD PARKING CORP is still fairing well by exceeding its industry average cash flow growth rate of -23.40%.
- Despite the current debt-to-equity ratio of 1.63, it is still below the industry average, suggesting that this level of debt is acceptable within the Commercial Services & Supplies industry. Despite the fact that STAN's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.57 is low and demonstrates weak liquidity.
-- Written by a member of TheStreet Ratings Staff