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) -- Radian Group (NYSE: RDN) 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 and disappointing return on equity.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass
- 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.
- RDN, with its very weak revenue results, has greatly underperformed against the industry average of 16.8%. 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 (-$0.56 versus -$3.41).
- Compared to its closing price of one year ago, RDN's share price has jumped by 353.81%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in RDN do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
--Written by a member of TheStreet Ratings Staff.Exclusive Offer: Jim Cramer's 'go-to' small/mid-cap guru Bryan Ashenberg only buys stocks he thinks could return 50-100%. See his top picks for 14-days FREE.