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NEW YORK (TheStreet) -- Health Insurance Innovations (HIIQ) has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate HEALTH INSURANCE INNOVATIONS (HIIQ) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Insurance industry. The net income has significantly decreased by 2927.4% when compared to the same quarter one year ago, falling from $0.41 million to -$11.54 million.
- 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 Insurance industry and the overall market, HEALTH INSURANCE INNOVATIONS's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 34.43%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 2312.50% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- HEALTH INSURANCE INNOVATIONS has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, HEALTH INSURANCE INNOVATIONS swung to a loss, reporting -$0.73 versus $0.15 in the prior year. This year, the market expects an improvement in earnings ($0.41 versus -$0.73).
- 47.32% is the gross profit margin for HEALTH INSURANCE INNOVATIONS which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -49.37% is in-line with the industry average.
- You can view the full analysis from the report here: HIIQ Ratings Report