NEW YORK ( TheStreet) -- Excel (NYSE: EXL) has been upgraded by TheStreet Ratings from sell to hold. 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 and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and poor profit margins. Highlights from the ratings report include:
- EXL's very impressive revenue growth greatly exceeded the industry average of 18.1%. Since the same quarter one year prior, revenues leaped by 233.2%. 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 0.67, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- After a year of stock price fluctuations, the net result is that EXL's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. 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 EXCEL TRUST INC is currently extremely low, coming in at 14.80%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, EXL's net profit margin of -11.30% 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 significantly decreased by 57.9% when compared to the same quarter one year ago, falling from -$1.10 million to -$1.74 million.