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, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
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Highlights from the ratings report include:
- STWD's very impressive revenue growth greatly exceeded the industry average of 17.9%. Since the same quarter one year prior, revenues leaped by 95.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.76, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- STARWOOD PROPERTY TRUST INC has improved earnings per share by 23.3% 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. We feel that this trend should continue. During the past fiscal year, STARWOOD PROPERTY TRUST INC increased its bottom line by earning $1.41 versus $1.14 in the prior year. This year, the market expects an improvement in earnings ($1.89 versus $1.41).
- The gross profit margin for STARWOOD PROPERTY TRUST INC is currently very high, coming in at 75.50%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 64.50% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 476.74% to $174.13 million when compared to the same quarter last year. In addition, STARWOOD PROPERTY TRUST INC has also vastly surpassed the industry average cash flow growth rate of 25.90%.
Starwood Property Trust, Inc. engages in originating, investing in, financing, and managing commercial mortgage loans, other commercial real estate debt investments, commercial mortgage-backed securities, and other commercial real estate-related debt investments. The company has a P/E ratio of 14.2, above the average real estate industry P/E ratio of 13.9 and below the S&P 500 P/E ratio of 17.7. Starwood Property has a market cap of $2.45 billion and is part of the
industry. Shares are up 13.7% 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.