Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model
NEW YORK (
-- DFC Global
) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its revenue growth. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
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Highlights from the ratings report include:
- DLLR's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 5.0%. 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.
- DFC GLOBAL CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, DFC GLOBAL CORP reported lower earnings of $1.16 versus $1.67 in the prior year. This year, the market expects an improvement in earnings ($1.74 versus $1.16).
- In its most recent trading session, DLLR has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
- Net operating cash flow has decreased to $89.80 million or 48.62% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Consumer Finance industry. The net income has significantly decreased by 214.5% when compared to the same quarter one year ago, falling from $31.80 million to -$36.40 million.
DFC Global Corp., through its subsidiaries, provides retail financial services to unbanked and under-banked consumers, and small businesses. The company has a P/E ratio of 10.7, below the S&P 500 P/E ratio of 17.7. DFC Global has a market cap of $622.3 million and is part of the financial sector and financial services industry. Shares are down 28.5% year to date as of the close of trading on Thursday.
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-- Written by a member of TheStreet Ratings Staff
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