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) -- Pacific Mercantile Bancorp (Nasdaq:PMBC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.
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- Net operating cash flow has significantly increased by 294.04% to $23.55 million when compared to the same quarter last year. In addition, PACIFIC MERCANTILE BANCORP has also vastly surpassed the industry average cash flow growth rate of -60.08%.
- The gross profit margin for PACIFIC MERCANTILE BANCORP is currently very high, coming in at 74.80%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, PMBC's net profit margin of -28.76% significantly underperformed when compared to the industry average.
- PACIFIC MERCANTILE BANCORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, PACIFIC MERCANTILE BANCORP reported lower earnings of $0.55 versus $0.92 in the prior year.
- 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 329.3% when compared to the same quarter one year ago, falling from $1.38 million to -$3.17 million.
-- Written by a member of TheStreet Ratings Staff
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