NEW YORK (TheStreet) -- Shares of Ocwen Financial Corp. (OCN) - Get Report are down by 6.53% to $8.16 in early afternoon trading on Thursday, one day after the financial services company announced that it is once again delaying its expected filing of its annual report.
The mortgage company said it's continuing to review the ability of its Home Loan Servicing Solutions Ltd. affiliate to fund new servicing advances and cautioned that failure may have material negative impact on its financial condition, the Wall Street Journal reports.
Ocwen is expecting to file its annual report by Monday, but had previously received an extension through Tuesday of this week, the Journal noted.
Additionally, Ocwen announced that its subsidiary, Ocwen Loan Servicing LLC., has reached an agreement for the sale by Ocwen of residential mortgage servicing rights on a portfolio consisting of approximately 55,500 largely performing loans owned by Freddie Mac (FNMA) with a total principal balance of approximately $9.6 billion to Green Tree, an indirectly held, wholly owned, subsidiary of Walter Investment Management Corp. (WAC) .
Separately, TheStreet Ratings team rates OCWEN FINANCIAL CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate OCWEN FINANCIAL CORP (OCN) 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 reasonable valuation levels, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly increased by 143.32% to $348.99 million when compared to the same quarter last year. In addition, OCWEN FINANCIAL CORP has also vastly surpassed the industry average cash flow growth rate of -5.45%.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.8%. Since the same quarter one year prior, revenues slightly dropped by 2.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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 Thrifts & Mortgage Finance industry. The net income has significantly decreased by 224.4% when compared to the same quarter one year ago, falling from $60.57 million to -$75.38 million.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 75.33%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 248.71% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, OCN is still more expensive than most of the other companies in its industry.
- You can view the full analysis from the report here: OCN Ratings Report