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 ( TheStreet) -- Manulife Financial Corporation (NYSE: MFC) 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 increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and poor profit margins.
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- MFC's very impressive revenue growth greatly exceeded the industry average of 17.7%. Since the same quarter one year prior, revenues leaped by 64.9%. 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.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
- 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 55.9% when compared to the same quarter one year ago, falling from $1,225.00 million to $540.00 million.
- The gross profit margin for MANULIFE FINANCIAL CORP is currently lower than what is desirable, coming in at 33.90%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 9.22% trails that of the industry average.
-- Written by a member of TheStreet Ratings Staff