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NEW YORK (TheStreet) -- Gain Capital Holdings (GCAP) 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 GAIN CAPITAL HOLDINGS INC (GCAP) a BUY. This is driven by multiple 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, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GCAP's very impressive revenue growth greatly exceeded the industry average of 11.3%. Since the same quarter one year prior, revenues leaped by 70.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Although GCAP's debt-to-equity ratio of 0.27 is very low, it is currently higher than that of the industry average.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Financial Services industry. The net income increased by 173.1% when compared to the same quarter one year prior, rising from $5.60 million to $15.30 million.
- GAIN CAPITAL HOLDINGS 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, GAIN CAPITAL HOLDINGS INC increased its bottom line by earning $0.79 versus $0.04 in the prior year. For the next year, the market is expecting a contraction of 83.5% in earnings ($0.13 versus $0.79).
- You can view the full analysis from the report here: GCAP Ratings Report