NEW YORK ( TheStreet) -- Greenlight Capital Re (Nasdaq: GLRE) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and generally poor debt management.

Highlights from the ratings report include:
  • The debt-to-equity ratio of 1.38 is relatively high when compared with the industry average, suggesting a need for better debt level management.
  • 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 Insurance industry. The net income has significantly decreased by 246.9% when compared to the same quarter one year ago, falling from -$12.39 million to -$42.99 million.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • GLRE's very impressive revenue growth greatly exceeded the industry average of 8.6%. Since the same quarter one year prior, revenues leaped by 79.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.

Greenlight Capital Re, Ltd., through its subsidiary, Greenlight Reinsurance, Ltd., operates as a specialty property and casualty reinsurer. The company has a P/E ratio of 16.5, equal to the average insurance industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Greenlight Capital Re has a market cap of $794.7 million and is part of the financial sector and insurance industry. Shares are down 5.6% year to date as of the close of trading on Thursday.

You can view the full Greenlight Capital Re Ratings Report or get investment ideas from our investment research center.
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