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) -- Kilroy Realty Corporation (NYSE: KRC) 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, compelling growth in net income, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.
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- KRC's revenue growth has slightly outpaced the industry average of 14.7%. Since the same quarter one year prior, revenues rose by 17.7%. 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.
- KILROY 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. During the past fiscal year, KILROY REALTY CORP continued to lose money by earning -$0.25 versus -$0.35 in the prior year. This year, the market expects an improvement in earnings ($0.20 versus -$0.25).
- 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 347.4% when compared to the same quarter one year prior, rising from $42.28 million to $189.15 million.
- Net operating cash flow has increased to $33.40 million or 38.05% when compared to the same quarter last year. In addition, KILROY REALTY CORP has also vastly surpassed the industry average cash flow growth rate of -53.58%.
-- Written by a member of TheStreet Ratings Staff