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"We rate SUN COMMUNITIES INC (SUI) 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 revenue growth and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in 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 3.1%. Since the same quarter one year prior, revenues rose by 13.3%. 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.
- This stock has managed to rise its share value by 48.60% over the past twelve months. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- SUN COMMUNITIES INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. 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, SUN COMMUNITIES INC increased its bottom line by earning $0.59 versus $0.32 in the prior year. For the next year, the market is expecting a contraction of 9.3% in earnings ($0.54 versus $0.59).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, SUN COMMUNITIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for SUN COMMUNITIES INC is currently extremely low, coming in at 0.69%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -9.59% is significantly below that of the industry average.
- You can view the full analysis from the report here: SUI Ratings Report