NEW YORK ( TheStreet) -- Starwood Property (NYSE: STWD) 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, expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- STWD's very impressive revenue growth greatly exceeded the industry average of 18.5%. Since the same quarter one year prior, revenues leaped by 107.4%. 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.
- The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels.
- The gross profit margin for STARWOOD PROPERTY TRUST INC is currently very high, coming in at 77.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 24.90% is above that of the industry average.
- Net operating cash flow has significantly increased by 3544.39% to $163.16 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 39.00%.
- STARWOOD PROPERTY TRUST INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, STARWOOD PROPERTY TRUST INC turned its bottom line around by earning $1.14 versus -$0.02 in the prior year. This year, the market expects an improvement in earnings ($1.71 versus $1.14).