Rating Change #8
HF Financial Corp (HFFC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and attractive valuation levels. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.
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Highlights from the ratings report include:
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Thrifts & Mortgage Finance industry average. The net income increased by 44.5% when compared to the same quarter one year prior, rising from $0.72 million to $1.03 million.
- The gross profit margin for HF FINANCIAL CORP is currently very high, coming in at 78.40%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, HFFC's net profit margin of 8.01% significantly trails the industry average.
- HF FINANCIAL 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, HF FINANCIAL CORP increased its bottom line by earning $0.74 versus $0.10 in the prior year.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, HF FINANCIAL CORP's return on equity is below that of both the industry average and the S&P 500.