NEW YORK ( TheStreet) -- Hudson Pacific Properties (NYSE: HPP) 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 feeble growth in the company's earnings per share, unimpressive growth in net income and poor profit margins. Highlights from the ratings report include:
- HPP's very impressive revenue growth greatly exceeded the industry average of 15.0%. Since the same quarter one year prior, revenues leaped by 110.7%. 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, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels.
- After a year of stock price fluctuations, the net result is that HPP'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.
- HUDSON PACIFIC PPTYS 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. For the next year, the market is expecting a contraction of 73.7% in earnings (-$0.33 versus -$0.19).
- 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 244.2% when compared to the same quarter one year ago, falling from -$0.17 million to -$0.59 million.
-- Written by a member of TheStreet RatingsStaff