NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its revenue growth. At the same time, however, we also find weaknesses including deteriorating net income, poor profit margins and feeble growth in the company's earnings per share.
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Highlights from the ratings report include:
- PCC's revenue growth trails the industry average of 18.2%. Since the same quarter one year prior, revenues slightly increased by 3.0%. 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 share price of PMC COMMERCIAL TRUST has not done very well: it is down 9.46% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
- PMC COMMERCIAL TRUST 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. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, PMC COMMERCIAL TRUST reported lower earnings of $0.45 versus $0.46 in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 131.0% when compared to the same quarter one year ago, falling from $1.34 million to -$0.42 million.
- The gross profit margin for PMC COMMERCIAL TRUST is rather low; currently it is at 21.20%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -10.50% is significantly below that of the industry average.
PMC Commercial Trust operates as a real estate investment trust (REIT). It primarily originates loans to small businesses, principally in the limited service hospitality industry, collateralized by first liens on the real estate of the related business. The company has a P/E ratio of 22.6, below the average real estate industry P/E ratio of 29.9 and above the S&P 500 P/E ratio of 17.7. PMC Commercial has a market cap of $79.1 million and is part of the
industry. Shares are up 6.7% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff
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.