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) -- Arkansas Best Corporation (Nasdaq: ABFS) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.
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- The revenue growth came in higher than the industry average of 1.6%. Since the same quarter one year prior, revenues rose by 18.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 26.76% and other important driving factors, this stock has surged by 45.06% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although ABFS had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- ARKANSAS BEST CORP has improved earnings per share by 26.8% 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, ARKANSAS BEST CORP swung to a loss, reporting -$0.34 versus $0.20 in the prior year. This year, the market expects an improvement in earnings ($0.12 versus -$0.34).
- 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 Road & Rail industry and the overall market, ARKANSAS BEST CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$0.21 million or 104.38% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
-- Written by a member of TheStreet Ratings Staff