NEW YORK ( TheStreet) -- Entertainment Properties (NYSE: EPR) 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 reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.
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- EPR's revenue growth trails the industry average of 18.0%. Since the same quarter one year prior, revenues slightly increased by 4.8%. 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 0.84, 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 $41.96 million or 19.86% when compared to the same quarter last year. Despite an increase in cash flow, ENTERTAINMENT PROPERTIES TR's average is still marginally south of the industry average growth rate of 25.83%.
- 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 48.8% when compared to the same quarter one year ago, falling from $41.73 million to $21.37 million.
- 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ENTERTAINMENT PROPERTIES TR's return on equity is below that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff