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) -- Ocwen Financial Corporation (NYSE:OCN) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, expanding profit margins and notable return on equity. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
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- OCN's very impressive revenue growth greatly exceeded the industry average of 50.6%. Since the same quarter one year prior, revenues leaped by 160.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 65.62% and other important driving factors, this stock has surged by 164.95% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, OCN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- OCWEN FINANCIAL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, OCWEN FINANCIAL CORP increased its bottom line by earning $1.30 versus $0.73 in the prior year. This year, the market expects an improvement in earnings ($4.20 versus $1.30).
- The gross profit margin for OCWEN FINANCIAL CORP is currently very high, coming in at 82.13%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, OCN's net profit margin of 13.72% significantly trails the industry average.
- 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 Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, OCWEN FINANCIAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
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