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)
-- CyrusOne (Nasdaq:
CONE) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 10.5%. Since the same quarter one year prior, revenues rose by 28.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Powered by its strong earnings growth of 50.00% and other important driving factors, this stock has surged by 25.15% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- CYRUSONE INC reported significant earnings per share improvement in the most recent quarter compared to 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, CYRUSONE INC reported poor results of -$1.32 versus -$0.36 in the prior year. This year, the market expects an improvement in earnings ($0.04 versus -$1.32).
- The gross profit margin for CYRUSONE INC is currently extremely low, coming in at 13.34%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.34% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to $6.10 million or 63.25% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
