NEW YORK (TheStreet) -- Park Sterling (Nasdaq:PSTB) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year. Highlights from the ratings report include:
- PSTB's very impressive revenue growth greatly exceeded the industry average of 2.6%. Since the same quarter one year prior, revenues leaped by 84.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- PARK STERLING CORP 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, PARK STERLING CORP continued to lose money by earning -$0.29 versus -$0.33 in the prior year. This year, the market expects an improvement in earnings ($0.04 versus -$0.29).
- The gross profit margin for PARK STERLING CORP is currently very high, coming in at 75.50%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -9.10% is in-line with the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market, PARK STERLING CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- PSTB has underperformed the S&P 500 Index, declining 17.00% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
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