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 (
) 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, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.
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Highlights from the ratings report include:
- OCN's very impressive revenue growth greatly exceeded the industry average of 1.6%. Since the same quarter one year prior, revenues leaped by 52.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 487.50% and other important driving factors, this stock has surged by 124.90% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- 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 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.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Thrifts & Mortgage Finance industry average, but is greater than that of the S&P 500. The net income increased by 577.0% when compared to the same quarter one year prior, rising from $9.65 million to $65.34 million.
Ocwen Financial Corporation, through its subsidiaries, engages in the servicing and origination of mortgage loans in the United States and internationally. The company has a P/E ratio of 29.6, above the S&P 500 P/E ratio of 17.7. Ocwen Financial has a market cap of $5.26 billion and is part of the financial sector and banking industry. Shares are up 4.7% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet Ratings Staff
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