NEW YORK ( TheStreet) -- BioMed Realty (NYSE: BMR) 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, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 19.2%. Since the same quarter one year prior, revenues rose by 14.1%. 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 debt-to-equity ratio is somewhat low, currently at 0.71, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- BIOMED REALTY TRUST INC's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, BIOMED REALTY TRUST INC's EPS of $0.18 remained unchanged from the prior years' EPS of $0.18. This year, the market expects an improvement in earnings ($0.28 versus $0.18).
- 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, BIOMED REALTY TRUST INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for BIOMED REALTY TRUST INC is rather low; currently it is at 24.00%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.90% significantly trails the industry average.
-- Written by a member of TheStreet Ratings Staff