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 (
-- Radian Group
) has been reiterated by TheStreet Ratings as a sell with a ratings score of D. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and weak operating cash flow.
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Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Thrifts & Mortgage Finance industry average. The net income has decreased by 10.8% when compared to the same quarter one year ago, dropping from -$169.23 million to -$187.50 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, RADIAN GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has declined marginally to -$165.97 million or 7.46% when compared to the same quarter last year. Despite a decrease in cash flow RADIAN GROUP INC is still fairing well by exceeding its industry average cash flow growth rate of -31.03%.
- RDN, with its very weak revenue results, has greatly underperformed against the industry average of 39.2%. Since the same quarter one year prior, revenues plummeted by 76.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- RADIAN GROUP INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, RADIAN GROUP INC swung to a loss, reporting -$3.41 versus $2.25 in the prior year. This year, the market expects an improvement in earnings (-$1.26 versus -$3.41).
Radian Group Inc., through its subsidiaries, operates as a credit enhancement company in the United States. The company operates in two segments, Mortgage Insurance and Financial Guaranty. Radian Group has a market cap of $2.3 billion and is part of the financial sector and insurance industry. Shares are up 114.7% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.
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