Why Wisdomtree Investments (WETF) Stock Dropped Today

NEW YORK (TheStreet) -- Wisdomtree Investments (WETF) stock dropped on Thursday after analysts at Citigroup reiterated a "sell" rating with target price of $9.50.

By market close, shares had fallen 9% to $9.45.

"Several factors keep us cautious," analysts wrote in the report. "Weekly volume dynamics remain disappointing into May, led by further attrition in DXJ while other segments are also experiencing mixed flow metrics. Despite over $700M YTD net outflows, DXJ still accounts for ~32% of 5/9 AUM, keeping alive asymmetric risks."

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Separately, TheStreet Ratings team rates WISDOMTREE INVESTMENTS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate WISDOMTREE INVESTMENTS INC (WETF) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, expanding profit margins, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • The revenue growth greatly exceeded the industry average of 5.1%. Since the same quarter one year prior, revenues rose by 46.3%. Growth in the company's revenue appears to have helped boost 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.
  • 41.87% 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 70.37% significantly outperformed against the industry average.
  • 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 $0.38 versus $0.08 in the prior year. This year, the market expects an improvement in earnings ($0.41 versus $0.38).
  • 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 284.6% when compared to the same quarter one year prior, rising from $7.85 million to $30.20 million.
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