Ashford Hospitality Trust Inc. Stock Upgraded (AHT)

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) -- Ashford Hospitality (NYSE: AHT) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and poor profit margins.

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Highlights from the ratings report include:
  • ASHFORD HOSPITALITY 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. This trend suggests that the performance of the business is improving. During the past fiscal year, ASHFORD HOSPITALITY TRUST continued to lose money by earning -$0.99 versus -$1.26 in the prior year. This year, the market expects an improvement in earnings (-$0.58 versus -$0.99).
  • 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 83.7% when compared to the same quarter one year prior, rising from -$14.69 million to -$2.39 million.
  • AHT, with its decline in revenue, underperformed when compared the industry average of 10.3%. Since the same quarter one year prior, revenues fell by 14.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has decreased to $11.08 million or 41.64% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ASHFORD HOSPITALITY TRUST's return on equity significantly trails that of both the industry average and the S&P 500.

Ashford Hospitality Trust, Inc. is a publicly owned real estate investment trust. The firm engages in investment and management of properties in the hospitality industry. It invests in the real estate markets of the United States. Ashford has a market cap of $1.05 billion and is part of the financial sector and real estate industry. Shares are up 44.6% year to date as of the close of trading on Friday.

You can view the full Ashford Ratings Report or get investment ideas from our investment research center.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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