Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet, Inc., or any of its contributors. TheStreet Ratings quantitative algorithm evaluates over 4,300 stocks on a daily basis by 32 different data factors and assigns a unique buy, sell, or hold recommendation on each stock. Click here to learn more.
NEW YORK (TheStreet) -- Sotherly Hotels (SOHO) - Get Report has been upgraded by TheStreet Ratings from Sell to Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate SOTHERLY HOTELS INC (SOHO) 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, reasonable valuation levels and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income 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 10.0%. Since the same quarter one year prior, revenues rose by 32.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The gross profit margin for SOTHERLY HOTELS INC is currently extremely low, coming in at 9.11%. Regardless of SOHO's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SOHO's net profit margin of -1.93% significantly underperformed when compared to the industry average.
- 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 decreased by 11.0% when compared to the same quarter one year ago, dropping from -$0.52 million to -$0.58 million.
- You can view the full analysis from the report here: SOHO Ratings Report