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) -- Expeditors International of Washington (Nasdaq: EXPD) 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, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including poor profit margins and disappointing return on equity.
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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 Air Freight & Logistics industry average. The net income increased by 4.7% when compared to the same quarter one year prior, going from $76.71 million to $80.32 million.
- EXPD 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 2.86, which clearly demonstrates the ability to cover short-term cash needs.
- EXPEDITORS INTL WASH INC has improved earnings per share by 8.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EXPEDITORS INTL WASH INC reported lower earnings of $1.57 versus $1.79 in the prior year. This year, the market expects an improvement in earnings ($1.76 versus $1.57).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Air Freight & Logistics industry and the overall market on the basis of return on equity, EXPEDITORS INTL WASH INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The gross profit margin for EXPEDITORS INTL WASH INC is currently extremely low, coming in at 12.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.69% trails that of the industry average.
-- Written by a member of TheStreet Ratings Staff