NEW YORK (TheStreet) -- Kennedy-Wilson Holdings (KW) - Get Report shares are down 3.14% to $25.32 on heavy volume in afternoon trading on Tuesday after the real estate investment and services company announced the pricing of the secondary offering of 7.5 million of its common stock at $25.55.
The company expects to use the net proceeds from the offering to repay the $150.3 million it owes under its unsecured revolving credit facility with the remainder of the proceeds to be used for acquisitions and investments.
The offering is expected to close March 27.
TheStreet Ratings team rates KENNEDY-WILSON HOLDINGS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate KENNEDY-WILSON HOLDINGS INC (KW) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- KW's very impressive revenue growth greatly exceeded the industry average of 1.9%. Since the same quarter one year prior, revenues leaped by 367.3%. 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.
- The gross profit margin for KENNEDY-WILSON HOLDINGS INC is rather high; currently it is at 62.85%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, KW's net profit margin of -20.33% significantly underperformed when compared to the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Real Estate Management & Development industry and the overall market, KENNEDY-WILSON HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- 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 Real Estate Management & Development industry. The net income has significantly decreased by 1152.2% when compared to the same quarter one year ago, falling from -$2.30 million to -$28.80 million.
- The debt-to-equity ratio is very high at 3.36 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- You can view the full analysis from the report here: KW Ratings Report
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