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. TheStreet Ratings quantitative algorithm evaluates over 4,300 stocks on a daily basis by 32 different data factors and assigns a unique buy, sell, or hold recommendation on each stock. Click here to learn more.
"We rate CYRUSONE INC (CONE) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 find that the company's profit margins have been poor overall."
Must Read: Warren Buffett's 25 Favorite Stocks
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 13.8%. Since the same quarter one year prior, revenues rose by 25.6%. 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 100.00% and other important driving factors, this stock has surged by 26.76% 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 (-$0.08 versus -$1.32).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, CYRUSONE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for CYRUSONE INC is rather low; currently it is at 15.09%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.11% significantly trails the industry average.
- You can view the full analysis from the report here: CONE Ratings Report