NEW YORK ( TheStreet) -- Macerich Company (NYSE: MAC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, compelling growth in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- MAC's revenue growth has slightly outpaced the industry average of 12.2%. Since the same quarter one year prior, revenues rose by 16.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in 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 228.6% when compared to the same quarter one year prior, rising from -$14.07 million to $18.09 million.
- Net operating cash flow has increased to $107.54 million or 24.72% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -14.23%.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.
- MACERICH CO has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, MACERICH CO increased its bottom line by earning $1.94 versus $1.73 in the prior year. For the next year, the market is expecting a contraction of 63.9% in earnings ($0.70 versus $1.94).