NEW YORK (TheStreet) -- 1st United Bancorp (Nasdaq:FUBC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and weak operating cash flow.
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- The revenue growth greatly exceeded the industry average of 16.3%. Since the same quarter one year prior, revenues rose by 24.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- 1ST UNITED BANCORP INC's earnings per share declined by 33.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, 1ST UNITED BANCORP INC increased its bottom line by earning $0.12 versus $0.08 in the prior year. This year, the market expects an improvement in earnings ($0.15 versus $0.12).
- The gross profit margin for 1ST UNITED BANCORP INC is currently very high, coming in at 76.80%. Regardless of FUBC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FUBC's net profit margin of 3.30% is significantly lower than the same period one year prior.
- In its most recent trading session, FUBC has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- 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 Commercial Banks industry. The net income has significantly decreased by 39.2% when compared to the same quarter one year ago, falling from $1.06 million to $0.65 million.
-- Written by a member of TheStreet Ratings Staff
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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