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 (
) 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, increase in net income and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself.
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Highlights from the ratings report include:
- MBI's very impressive revenue growth greatly exceeded the industry average of 12.1%. Since the same quarter one year prior, revenues leaped by 10000.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 167.4% when compared to the same quarter one year prior, rising from -$178.00 million to $120.00 million.
- 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 reported lower earnings of $1.10 versus $6.33 in the prior year. This year, the market expects an improvement in earnings ($1.27 versus $1.10).
- The debt-to-equity ratio is very high at 2.28 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 $28.00 million or 97.75% 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. MBIA has a market cap of $1.8 billion and is part of the financial sector and insurance industry. Shares are down 23.7% year to date as of the close of trading on Wednesday.
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