Why Shares of Ocwen Financial Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Ocwen Financial (NYSE: OCN  ) fell as much as 11% today, after reporting third quarter earnings.

So what: Revenue rose 89.3% in the quarter, to $232.7 million, topping estimates of $230.0 million, but the bottom line is the focus today. Earnings per share were $0.37, $0.03 lower than estimates.

Now what: The bottom line has been a struggle for Ocwen over the past year. This is the third earnings miss in the last four quarters, and investors are clearly questioning lofty expectations for next year. Analysts have set their target at $4.06 in earnings per share next year and, if the company met that, the stock would be a steal. I don't think this is a reason to panic considering the fact that results are improving but it may be a chance for investors to lower expectations a bit in the future.

Interested in more info on Ocwen Financial? Add it to your watchlist by clicking here.

 

Fool contributor Travis Hoium has no positions in the stocks mentioned above. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDrawThe Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Ocwen Financial. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2090444, ~/Articles/ArticleHandler.aspx, 10/24/2014 4:50:20 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement