NEW YORK (TheStreet) -- Shares of WisdomTree Investments(WETF) - Get Report closed trading down 11.04% to $19.10 on Thursday after the European Central Bank announced a cut to its deposit rate today, sending the currency-hedged ETF asset manager spiraling.
The ECB reduced the deposit rate by 10 basis points to a record low of -0.03%, a move that analysts expect to put negative pressure on the euro.
Analysts on average were expecting the bank to cut the rate to -0.04%.
WisdomTree's most popular products are its hedged currency ETFs for foreign currency, though shares fell today despite an unexpected increase in the euro versus the dollar.
TheStreet Ratings team rates WISDOMTREE INVESTMENTS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate WISDOMTREE INVESTMENTS INC (WETF) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, increase in net income, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- WETF's very impressive revenue growth greatly exceeded the industry average of 5.6%. Since the same quarter one year prior, revenues leaped by 71.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- WISDOMTREE INVESTMENTS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WISDOMTREE INVESTMENTS INC increased its bottom line by earning $0.45 versus $0.38 in the prior year. This year, the market expects an improvement in earnings ($0.58 versus $0.45).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 119.2% when compared to the same quarter one year prior, rising from $10.62 million to $23.29 million.
- 49.48% is the gross profit margin for WISDOMTREE INVESTMENTS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 28.83% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 85.97% to $44.62 million when compared to the same quarter last year. Despite an increase in cash flow of 85.97%, WISDOMTREE INVESTMENTS INC is still growing at a significantly lower rate than the industry average of 271.57%.
- You can view the full analysis from the report here: WETF
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.