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) -- Acadia Realty (NYSE: AKR) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, growth in earnings per share, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- The revenue growth came in higher than the industry average of 13.1%. Since the same quarter one year prior, revenues rose by 33.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- ACADIA REALTY TRUST 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. During the past fiscal year, ACADIA REALTY TRUST increased its bottom line by earning $0.50 versus $0.44 in the prior year. This year, the market expects an improvement in earnings ($0.54 versus $0.50).
- 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 169.8% when compared to the same quarter one year prior, rising from $7.89 million to $21.28 million.
- The gross profit margin for ACADIA REALTY TRUST is rather low; currently it is at 24.40%. Regardless of AKR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AKR's net profit margin of 58.40% significantly outperformed against the industry.
-- Written by a member of TheStreet Ratings Staff