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NEW YORK (TheStreet) -- Home Loan Servicing Soltns (HLSS) has been upgraded by TheStreet Ratings from Hold to Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate HOME LOAN SERVICING SOLTNS (HLSS) a BUY. This is driven by a number of 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, compelling growth in net income, expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 12.8%. Since the same quarter one year prior, revenues rose by 43.2%. 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.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Thrifts & Mortgage Finance industry average. The net income increased by 15.6% when compared to the same quarter one year prior, going from $43.83 million to $50.66 million.
- The gross profit margin for HOME LOAN SERVICING SOLTNS is currently very high, coming in at 95.30%. Regardless of HLSS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HLSS's net profit margin of 53.24% significantly outperformed against the industry.
- Net operating cash flow has increased to $268.47 million or 17.67% when compared to the same quarter last year. Despite an increase in cash flow of 17.67%, HOME LOAN SERVICING SOLTNS is still growing at a significantly lower rate than the industry average of 120.94%.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, HOME LOAN SERVICING SOLTNS has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- You can view the full analysis from the report here: HLSS Ratings Report
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