Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Tiptree Financial (Nasdaq: TIPT) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, disappointing return on equity and poor profit margins.
- 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 significantly underperformed against the S&P 500 and did not exceed that of the Diversified Financial Services industry. The net income has decreased by 22.2% when compared to the same quarter one year ago, dropping from $1.32 million to $1.03 million.
- The debt-to-equity ratio is very high at 12.41 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- 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 Diversified Financial Services industry and the overall market, TIPTREE FINANCIAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for TIPTREE FINANCIAL INC is currently extremely low, coming in at 9.92%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 2.42% trails that of the industry average.
- TIPTREE FINANCIAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, TIPTREE FINANCIAL INC swung to a loss, reporting -$0.66 versus $0.57 in the prior year.