Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
NEW YORK (
) 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, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 6.3%. Since the same quarter one year prior, revenues rose by 29.9%. Growth in the company's revenue appears to have helped boost the 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 220.8% when compared to the same quarter one year prior, rising from -$2.64 million to $3.19 million.
- HUDSON PACIFIC PPTYS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, HUDSON PACIFIC PPTYS INC continued to lose money by earning -$0.20 versus -$0.43 in the prior year. For the next year, the market is expecting a contraction of 75.0% in earnings (-$0.35 versus -$0.20).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, HUDSON PACIFIC PPTYS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- In its most recent trading session, HPP 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, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
Hudson Pacific Properties, Inc. operates as a vertically integrated real estate trust (REIT) in the United States. Hudson Pacific has a market cap of $1.48 billion and is part of the financial sector and real estate industry. Shares are up 2.1% year to date as of the close of trading on Friday.
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