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"We rate FIDELITY NATL FINL FNF GROUP (FNF) 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 revenue growth, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- FNF's revenue growth trails the industry average of 24.2%. Since the same quarter one year prior, revenues slightly increased by 3.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, FNF's share price has jumped by 41.65%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- FIDELITY NATL FINL FNF GROUP's earnings per share declined by 33.9% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, FIDELITY NATL FINL FNF GROUP reported lower earnings of $1.74 versus $2.62 in the prior year. This year, the market expects an improvement in earnings ($1.85 versus $1.74).
- Despite currently having a low debt-to-equity ratio of 0.56, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
- The gross profit margin for FIDELITY NATL FINL FNF GROUP is rather low; currently it is at 15.30%. Regardless of FNF's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.87% trails the industry average.
- You can view the full analysis from the report here: FNF Ratings Report
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