Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Hersha Hospitality (NYSE: HT) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and poor profit margins.
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- HERSHA HOSPITALITY TRUST reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HERSHA HOSPITALITY TRUST continued to lose money by earning -$0.02 versus -$0.05 in the prior year. This year, the market expects an improvement in earnings ($0.06 versus -$0.02).
- HT, with its decline in revenue, underperformed when compared the industry average of 8.3%. Since the same quarter one year prior, revenues slightly dropped by 5.3%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- 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. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, HERSHA HOSPITALITY TRUST underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for HERSHA HOSPITALITY TRUST is rather low; currently it is at 15.66%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.70% significantly trails the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 60.1% when compared to the same quarter one year ago, falling from $6.17 million to $2.46 million.