Rating Change #6
Goldcorp Inc (GG) 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, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.
Highlights from the ratings report include:
- GG's revenue growth has slightly outpaced the industry average of 2.4%. Since the same quarter one year prior, revenues rose by 10.9%. 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.
- GG's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GG has a quick ratio of 2.29, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for GOLDCORP INC is rather high; currently it is at 58.60%. Regardless of GG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GG's net profit margin of 35.50% significantly outperformed against the industry.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 31.48%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 37.03% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- 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. When compared to other companies in the Metals & Mining industry and the overall market, GOLDCORP INC's return on equity is below that of both the industry average and the S&P 500.
Goldcorp Inc. engages in the acquisition, development, exploration, and operation of precious metal properties. It primarily explores gold, silver, copper, lead, and zinc. The company has a P/E ratio of 17.9, equal to the average metals & mining industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Goldcorp has a market cap of $31.69 billion and is part of the basic materials sector and metals & mining industry. Shares are down 13.5% year to date as of the close of trading on Tuesday.You can view the full Goldcorp Ratings Report or get investment ideas from our investment research center.