Equity One Inc Stock Downgraded (EQY)

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) -- Equity One (NYSE: EQY) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels 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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Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.7%. Since the same quarter one year prior, revenues slightly increased by 5.3%. 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.
  • EQUITY ONE 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. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EQUITY ONE INC turned its bottom line around by earning $0.31 versus -$0.10 in the prior year. This year, the market expects an improvement in earnings ($0.44 versus $0.31).
  • The gross profit margin for EQUITY ONE INC is currently lower than what is desirable, coming in at 33.35%. Regardless of EQY's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, EQY's net profit margin of -2.71% significantly underperformed when compared to 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 107.1% when compared to the same quarter one year ago, falling from $33.76 million to -$2.41 million.

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