NEW YORK ( TheStreet) -- Excel (NYSE: EXL) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and poor profit margins.
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- 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 81.0% when compared to the same quarter one year ago, falling from $1.94 million to $0.37 million.
- The gross profit margin for EXCEL TRUST INC is rather low; currently it is at 18.20%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, EXL's net profit margin of 1.80% is significantly lower than the same period one year prior.
- 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, EXCEL TRUST INC's return on equity significantly trails that of both the industry average and the S&P 500.
- EXCEL TRUST 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, EXCEL TRUST INC reported poor results of -$0.39 versus -$0.32 in the prior year. This year, the market expects an improvement in earnings (-$0.22 versus -$0.39).
- Compared to where it was a year ago today, the stock is now trading at a higher level, and has traded in line with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
-- Written by a member of TheStreet Ratings Staff