NEW YORK ( TheStreet) -- LaSalle Hotel Properties (NYSE: LHO) has been downgraded by TheStreet Ratings from buy 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 impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
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- LHO's revenue growth has slightly outpaced the industry average of 17.9%. Since the same quarter one year prior, revenues rose by 19.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.72, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- 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 Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, LASALLE HOTEL PROPERTIES underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for LASALLE HOTEL PROPERTIES is rather low; currently it is at 21.80%. Regardless of LHO's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 14.50% trails the industry average.
-- Written by a member of TheStreet Ratings Staff