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) -- Prologis (NYSE: PLD) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. At the same time, however, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
- PLD, with its decline in revenue, underperformed when compared the industry average of 9.9%. Since the same quarter one year prior, revenues slightly dropped by 7.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing 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, PROLOGIS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- PROLOGIS INC has experienced 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, PROLOGIS INC turned its bottom line around by earning $0.42 versus -$0.34 in the prior year. For the next year, the market is expecting a contraction of 26.2% in earnings ($0.31 versus $0.42).
- The gross profit margin for PROLOGIS INC is rather low; currently it is at 24.09%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.42% significantly trails the industry average.
- Net operating cash flow has decreased to $72.24 million or 44.05% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.