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 revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 17.3%. Since the same quarter one year prior, revenues rose by 15.0%. 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 debt-to-equity ratio is somewhat low, currently at 0.98, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- SL GREEN REALTY CORP 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, SL GREEN REALTY CORP increased its bottom line by earning $6.79 versus $2.93 in the prior year. For the next year, the market is expecting a contraction of 88.8% in earnings ($0.76 versus $6.79).
- The gross profit margin for SL GREEN REALTY CORP is currently lower than what is desirable, coming in at 33.90%. Regardless of SLG's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SLG's net profit margin of 31.80% compares favorably to the industry average.
SL Green Realty Corp. is a real estate investment trust (REIT). The firm engages in the property management, acquisitions, financing, development, construction, and leasing. It also provides tenant services to its clients. The firm invests in real estate markets of the United States. The company has a P/E ratio of 13.1, above the average real estate industry P/E ratio of 11.6 and below the S&P 500 P/E ratio of 17.7. SL Green has a market cap of $6.9 billion and is part of the
industry. Shares are up 14.7% year to date as of the close of trading on Thursday.
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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.