Rating Change #4
(MBI - Get Report)
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, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and weak operating cash flow.
Highlights from the ratings report include:
- MBI's very impressive revenue growth greatly exceeded the industry average of 0.7%. Since the same quarter one year prior, revenues leaped by 484.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 338.23% and other important driving factors, this stock has surged by 46.76% 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.
- MBIA 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, MBIA INC swung to a loss, reporting -$6.67 versus $0.28 in the prior year. This year, the market expects an improvement in earnings ($6.18 versus -$6.67).
- The debt-to-equity ratio is very high at 4.71 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- Net operating cash flow has significantly decreased to -$557.00 million or 311.49% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
MBIA Inc., together with its subsidiaries, provides financial guarantee insurance and related reinsurance, advisory, and portfolio services for the public and structured finance markets; and asset management advisory services in the United States and internationally. The company has a P/E ratio of 5.2, above the average insurance industry P/E ratio of five and below the S&P 500 P/E ratio of 17.7. MBIA has a market cap of $2.04 billion and is part of the
industry. Shares are down 10.1% year to date as of the close of trading on Tuesday.
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