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"We rate ROUSE PROPERTIES INC (RSE) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 2.5%. Since the same quarter one year prior, revenues rose by 23.7%. 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.
- Net operating cash flow has increased to $28.10 million or 43.25% when compared to the same quarter last year. In addition, ROUSE PROPERTIES INC has also vastly surpassed the industry average cash flow growth rate of -47.29%.
- ROUSE PROPERTIES INC has experienced 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, ROUSE PROPERTIES INC continued to lose money by earning -$0.92 versus -$1.29 in the prior year. This year, the market expects an improvement in earnings (-$0.76 versus -$0.92).
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ROUSE PROPERTIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for ROUSE PROPERTIES INC is currently extremely low, coming in at 0.48%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -35.50% is significantly below that of the industry average.
- You can view the full analysis from the report here: RSE Ratings Report
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