NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 14.7%. Since the same quarter one year prior, revenues rose by 11.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- WASHINGTON REIT has improved earnings per share by 20.0% in the most recent quarter compared to 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, WASHINGTON REIT reported lower earnings of $0.21 versus $0.40 in the prior year. This year, the market expects an improvement in earnings ($0.44 versus $0.21).
- Despite the current debt-to-equity ratio of 1.57, it is still below the industry average, suggesting that this level of debt is acceptable within the Real Estate Investment Trusts (REITs) industry.
- 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 on the basis of return on equity, WASHINGTON REIT underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for WASHINGTON REIT is currently lower than what is desirable, coming in at 30.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 8.10% significantly trails the industry average.
Washington Real Estate Investment Trust is an equity real estate investment trust (REIT). The company engages in the ownership, operation, and development of real properties. The firm invests in real estate markets of the greater Washington D.C. metro region. The company has a P/E ratio of 128.7, above the average real estate industry P/E ratio of 67.3 and above the S&P 500 P/E ratio of 17.7. Washington REIT has a market cap of $2 billion and is part of the
industry. Shares are down 2.6% year to date as of the close of trading on Monday.
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