NEW YORK (TheStreet) -- First Interstate Bancsystem (Nasdaq:FIBK) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, expanding profit margins, solid stock price performance and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results. Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 29.6%. Since the same quarter one year prior, revenues slightly increased by 1.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- FIRST INTERSTATE BANCSYSTEM has improved earnings per share by 30.0% 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. We feel that this trend should continue. During the past fiscal year, FIRST INTERSTATE BANCSYSTEM increased its bottom line by earning $0.96 versus $0.79 in the prior year. This year, the market expects an improvement in earnings ($1.11 versus $0.96).
- The gross profit margin for FIRST INTERSTATE BANCSYSTEM is currently very high, coming in at 79.40%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, FIBK's net profit margin of 12.80% significantly trails the industry average.
- After a year of stock price fluctuations, the net result is that FIBK's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Commercial Banks industry average, but is greater than that of the S&P 500. The net income increased by 28.5% when compared to the same quarter one year prior, rising from $9.51 million to $12.21 million.
-- Written by a member of TheStreet RatingsStaff
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