NEW YORK ( TheStreet) -- Realpage (Nasdaq: RP) has been downgraded by TheStreet Ratings from hold to sell. The area that we feel has been the company's primary weakness has been its disappointing return on equity. Highlights from the ratings report include:
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Software industry and the overall market, REALPAGE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has increased to $10.90 million or 17.71% when compared to the same quarter last year. Despite an increase in cash flow, REALPAGE INC's average is still marginally south of the industry average growth rate of 22.15%.
- Compared to where it was trading one year ago, RP is down 40.91% to its most recent closing price of 17.70. Looking ahead, our view is that this stock still does not have good upside potential and may even suffer further declines.
- REALPAGE INC reported significant earnings per share improvement in the most recent quarter compared to 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, REALPAGE INC reported poor results of -$0.03 versus $0.00 in the prior year. This year, the market expects an improvement in earnings ($0.48 versus -$0.03).
- The gross profit margin for REALPAGE INC is rather high; currently it is at 64.30%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, RP's net profit margin of 2.30% significantly trails the industry average.
-- Written by a member of TheStreet Ratings Staff