NEW YORK ( TheStreet) -- Greenlight Capital Re (Nasdaq: GLRE) has been upgraded by TheStreet Ratings from hold to buy. The company's strongest point has been its a solid financial position based on a variety of debt and liquidity measures that we have looked at. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share. Highlights from the ratings report include:
- GLRE, with its decline in revenue, underperformed when compared the industry average of 7.0%. Since the same quarter one year prior, revenues fell by 18.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The share price of GREENLIGHT CAPITAL RE LTD has not done very well: it is down 8.88% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
- GREENLIGHT CAPITAL RE LTD has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, GREENLIGHT CAPITAL RE LTD reported lower earnings of $2.42 versus $5.71 in the prior year. For the next year, the market is expecting a contraction of 78.9% in earnings ($0.51 versus $2.42).
- 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 115.4% when compared to the same quarter one year ago, falling from $29.01 million to -$4.48 million.
- The debt-to-equity ratio of 1.33 is relatively high when compared with the industry average, suggesting a need for better debt level management.