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) -- Nomura Holdings (NYSE: NMR) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.
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- Powered by its strong earnings growth of 187.50% and other important driving factors, this stock has surged by 117.11% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although NMR had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- 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 207.7% when compared to the same quarter one year prior, rising from $276.94 million to $852.11 million.
- NMR, with its decline in revenue, underperformed when compared the industry average of 5.4%. Since the same quarter one year prior, revenues fell by 34.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- NOMURA HOLDINGS 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, NOMURA HOLDINGS INC increased its bottom line by earning $0.31 versus $0.04 in the prior year. For the next year, the market is expecting a contraction of 78.4% in earnings ($0.07 versus $0.31).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Capital Markets industry and the overall market, NOMURA HOLDINGS INC's return on equity is below that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff