NEW YORK ( TheStreet) -- Hersha Hospitality (NYSE: HT) 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:
- Despite its growing revenue, the company underperformed as compared with the industry average of 18.1%. Since the same quarter one year prior, revenues rose by 15.2%. 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 0.96, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- Net operating cash flow has increased to $21.15 million or 38.78% when compared to the same quarter last year. Despite an increase in cash flow, HERSHA HOSPITALITY TRUST's average is still marginally south of the industry average growth rate of 40.53%.
- The gross profit margin for HERSHA HOSPITALITY TRUST is rather low; currently it is at 19.80%. Regardless of HT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, HT's net profit margin of -27.10% 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 1705.9% when compared to the same quarter one year ago, falling from $1.34 million to -$21.50 million.