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 (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, weak operating cash flow and poor profit margins.
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Highlights from the ratings report include:
- EQR's revenue growth has slightly outpaced the industry average of 12.1%. Since the same quarter one year prior, revenues rose by 20.7%. 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.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 600.4% when compared to the same quarter one year prior, rising from $145.30 million to $1,017.69 million.
- EQUITY RESIDENTIAL 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. 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, EQUITY RESIDENTIAL increased its bottom line by earning $0.82 versus $0.15 in the prior year. This year, the market expects an improvement in earnings ($0.83 versus $0.82).
- Net operating cash flow has decreased to $193.51 million or 17.66% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, EQUITY RESIDENTIAL has marginally lower results.
- In its most recent trading session, EQR has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
Equity Residential, a real estate investment trust (REIT), engages in the acquisition, development, and management of multifamily properties in the United States. Equity has a market cap of $21.7 billion and is part of the financial sector and real estate industry. The company has a P/E ratio of 110.00, above the S&P 500 P/E ratio of 18.00. Shares are up 6.4% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.
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