Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model NEW YORK ( TheStreet) -- Terreno Realty Corporation (NYSE: TRNO) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been poor profit margins.
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- The gross profit margin for TERRENO REALTY CORP is rather low; currently it is at 18.40%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, TRNO's net profit margin of 3.40% is significantly lower than the same period one year prior.
- In its most recent trading session, TRNO has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
- Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, TERRENO REALTY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 342.67% to $2.52 million when compared to the same quarter last year. In addition, TERRENO REALTY CORP has also vastly surpassed the industry average cash flow growth rate of 60.06%.
- TERRENO REALTY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, TERRENO REALTY CORP continued to lose money by earning -$0.40 versus -$0.45 in the prior year. This year, the market expects an improvement in earnings (-$0.05 versus -$0.40).
-- Written by a member of TheStreet Ratings Staff