Street Capital Group, Inc. :CXSNF-US: Earnings Analysis: Q1, 2017 By the Numbers : May 26, 2017

Street Capital Group, Inc. reports financial results for the quarter ended March 31, 2017.

We analyze the earnings along side the following peers of Street Capital Group, Inc. – PennyMac Financial Services, Inc. Class A, MTY Food Group Inc., Ellington Financial LLC and Heritage Global Inc. (PFSI-US, MTY-CA, EFC-US and HGBL-US) that have also reported for this period.


  • Summary numbers: Revenues of USD 9.45 million, Net Earnings of USD -1.95 million.
  • Gross margins narrowed from 87.44% to 84.13% compared to the same period last year, operating (EBITDA) margins now -23.07% from 23.44%.
  • Year-on-year change in operating cash flow of -1,393.51% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Narrowing of operating margins contributed to decline in earnings.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2017-03-31 2016-12-31 2016-09-30 2016-06-30 2016-03-31
Relevant Numbers (Quarterly)
Revenues (mil) 9.45 12.39 18.3 16.55 10.64
Revenue Growth (%YOY) -11.18 9.61 23.2 -22.8 -58.89
Earnings (mil) -1.95 0.34 5.36 4.11 2.18
Earnings Growth (%YOY) -189.31 116.43 -1.37 113.37 -21.95
Net Margin (%) -20.59 2.78 29.32 24.87 20.48
EPS -0.02 0 0.05 0.03 0.01
Return on Equity (%) -8.07 1.39 21.92 17.56 9.66
Return on Assets (%) -2.1 0.35 5.71 5.24 3.06

Access our Ratings and Scores for Street Capital Group, Inc.

Market Share Versus Profits

Revenues History
Earnings History

CXSNF-US‘s change in revenue this period compared to the same period last year of -11.18% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that CXSNF-US is holding onto its market share. Also, for comparison purposes, revenues changed by -23.69% and earnings by -664.62% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s year-on-year decline in earnings was influenced by a weakening in gross margins from 87.44% to 84.13%, as well as issues with cost controls. As a result, operating margins (EBITDA margins) went from 23.44% to -23.07% in this time frame. For comparison, gross margins were 84.24% and EBITDA margins were -5.18% in the previous period.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Cash Versus Earnings – Sustainable Performance?

It is important to examine a company�s cash versus earnings numbers to gauge whether its performance is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Cash Flow based Earnings, Likely Non-cash Earnings, Low Cash Flow Base, Likely Undeclared Earnings

CXSNF-US‘s change in operating cash flow of -1,393.51% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.


The company’s decline in earnings has been influenced by the following factors: (1) Decline in operating margins (EBIT margins) from 20.43% to -27.20% and (2) one-time items that contributed to a decrease in pretax margins from 26.00% to -27.20%

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for Street Capital Group, Inc.

Company Profile

Street Capital Group, Inc. engages in the business of financial solutions. Through the Street Capital Bank of Canada, it offers a range of deposit and residential mortgage, consumer lending, and related services to Canadians. The company was founded by Allan C. Silber on August 2, 1979 and is headquartered in Toronto, Canada.

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