NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally poor debt management, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- Currently the debt-to-equity ratio of 1.76 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, CIM has underperformed the S&P 500 Index, declining 15.59% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The gross profit margin for CHIMERA INVESTMENT CORP is currently very high, coming in at 93.10%. Regardless of CIM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CIM's net profit margin of 71.70% significantly outperformed against the industry.
- The revenue growth came in higher than the industry average of 7.3%. Since the same quarter one year prior, revenues rose by 26.6%. 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.
Chimera Investment Corporation operates as a real estate investment trust (REIT) in the United States. The company has a P/E ratio of 5.4, equal to the average real estate industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Chimera Investment has a market cap of $3.4 billion and is part of the
industry. Shares are down 20.9% year to date as of the close of trading on Tuesday.
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