Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK (TheStreet) -- West (Nasdaq:WTBA) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, solid stock price performance, notable return on equity and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- The gross profit margin for WEST BANCORPORATION INC is currently very high, coming in at 88.69%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 28.13% significantly outperformed against the industry average.
- WEST BANCORPORATION INC reported flat earnings per share in the most recent quarter. 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, WEST BANCORPORATION INC increased its bottom line by earning $0.92 versus $0.74 in the prior year. This year, the market expects an improvement in earnings ($0.99 versus $0.92).
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Net operating cash flow has increased to $3.30 million or 13.08% when compared to the same quarter last year. Despite an increase in cash flow of 13.08%, WEST BANCORPORATION INC is still growing at a significantly lower rate than the industry average of 106.24%.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, WEST BANCORPORATION INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
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