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 (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.
- ACTIVE STOCK TRADERS: Check out TheStreet's special offer for Real Money, headlined by Jim Cramer, now!
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Commercial Banks industry average. The net income increased by 18.0% when compared to the same quarter one year prior, going from $2.11 million to $2.50 million.
- Net operating cash flow has significantly increased by 2769.32% to $17.30 million when compared to the same quarter last year. In addition, AMERIS BANCORP has also vastly surpassed the industry average cash flow growth rate of -17.48%.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 28.57% over the past year, a rise that has exceeded that of the S&P 500 Index. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- AMERIS BANCORP has improved earnings per share by 16.7% 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, AMERIS BANCORP turned its bottom line around by earning $0.75 versus -$0.40 in the prior year. For the next year, the market is expecting a contraction of 25.3% in earnings ($0.56 versus $0.75).
- 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 Commercial Banks industry and the overall market, AMERIS BANCORP's return on equity is below that of both the industry average and the S&P 500.
Ameris Bancorp operates as the holding company for the Ameris Bank, which provides a range of banking services to retail and commercial customers. The company has a P/E ratio of 12.8, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Ameris has a market cap of $287.5 million and is part of the
industry. Shares are up 17.2% year to date as of the close of trading on Friday.
You can view the full
or get investment ideas from our
-- Written by a member of TheStreet Ratings Staff