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) -- Essex Property (NYSE: ESS) 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, compelling growth in net income 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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- ESS's revenue growth has slightly outpaced the industry average of 16.9%. Since the same quarter one year prior, revenues rose by 17.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 94.2% when compared to the same quarter one year prior, rising from $9.06 million to $17.59 million.
- ESSEX PROPERTY TRUST reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, ESSEX PROPERTY TRUST reported lower earnings of $1.00 versus $1.14 in the prior year.
- 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ESSEX PROPERTY TRUST's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for ESSEX PROPERTY TRUST is currently lower than what is desirable, coming in at 34.20%. Regardless of ESS'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 12.20% trails the industry average.
-- Written by a member of TheStreet Ratings Staff