NEW YORK (TheStreet) -- First Potomac Realty (NYSE:FPO) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust 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 feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 19.0%. Since the same quarter one year prior, revenues rose by 38.1%. 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.
- Even though the current debt-to-equity ratio is 1.28, it is still below the industry average, suggesting that this level of debt is acceptable within the Real Estate Investment Trusts (REITs) industry.
- This stock's share value has moved by only 7.58% over the past year. 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 FIRST POTOMAC REALTY TRUST is rather low; currently it is at 15.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -7.40% is significantly below that of the industry average.
- Net operating cash flow has decreased to $10.26 million or 12.26% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
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