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Central Pacific Financial Corporation Stock Upgraded (CPF)

Editor's Note: 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.

NEW YORK (TheStreet) -- Central Pacific Financial Corporation (NYSE:CPF) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

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Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 16.2%. Since the same quarter one year prior, revenues slightly increased by 2.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for CENTRAL PACIFIC FINANCIAL CP is currently very high, coming in at 109.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.50% is above that of the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, CENTRAL PACIFIC FINANCIAL CP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The strong earnings growth this company has enjoyed -- up -- has apparently played a role in driving up its share price by a solid 34.02%. In addition, the rise in the general market has likely contributed to this stock's strong performance during this past year.Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • Net operating cash flow has significantly decreased to $1.29 million or 60.68% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
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Central Pacific Financial Corp. operates as the bank holding company for Central Pacific Bank that provides commercial banking services to businesses, professionals, and individuals in Hawaii. The company has a P/E ratio of 19.9, above the average banking industry P/E ratio of 14.6 and above the S&P 500 P/E ratio of 17.7. Central Pacific Financial has a market cap of $616.3 million and is part of the financial sector and banking industry. Shares are up 13.9% year to date as of the close of trading on Friday.

You can view the full Central Pacific Financial Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

Editor's Note: 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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