WisdomTree Investments (WETF) Falls Despite Positive Quarterly Results

NEW YORK (TheStreet) -- WisdomTree Investments (WETF) was losing 4.6% to $13.76 Friday following its earnings report that beat on revenue and was in-line in earnings.

The investment company posted earnings of 12 cents a share for the fourth quarter, matching the Capital IQ Consensus Estimate. Revenue for the quarter grew 83.1% to $43.2 million, compared to analyst estimates of $42.75 million.

The revenue increase is "primarily due to higher average AUM as a result of positive net inflows into our ETFs and market appreciation," according to the ETF issuer's press release.

In a separate announcement earlier in the day WisdomTree announced it will spend $20 million to fund a four-year European expansion. The expansion will form WisdomTree Europe that will house WisdomTree and Boost products.

TheStreet Ratings team rates WISDOMTREE INVESTMENTS INC as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate WISDOMTREE INVESTMENTS INC (WETF) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • WETF's very impressive revenue growth greatly exceeded the industry average of 14.8%. Since the same quarter one year prior, revenues leaped by 83.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Capital Markets industry and the overall market, WISDOMTREE INVESTMENTS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • WISDOMTREE INVESTMENTS 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. We feel that this trend should continue. During the past fiscal year, WISDOMTREE INVESTMENTS INC increased its bottom line by earning $0.08 versus $0.03 in the prior year. This year, the market expects an improvement in earnings ($0.37 versus $0.08).
  • 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 230.1% when compared to the same quarter one year prior, rising from $4.53 million to $14.97 million.
  • 37.97% is the gross profit margin for WISDOMTREE INVESTMENTS INC which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 37.76% significantly outperformed against the industry average.