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 expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.
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Highlights from the ratings report include:
- The gross profit margin for AMERIS BANCORP is currently very high, coming in at 76.00%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, ABCB's net profit margin of 4.60% significantly trails the industry average.
- Despite the weak revenue results, ABCB has outperformed against the industry average of 18.6%. Since the same quarter one year prior, revenues slightly dropped by 0.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
- 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 88.4% when compared to the same quarter one year ago, falling from $16.46 million to $1.90 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, AMERIS BANCORP underperformed against that of the industry average and is significantly less than that of 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 35.2, above the average banking industry P/E ratio of 12 and above the S&P 500 P/E ratio of 17.7. Ameris has a market cap of $268.4 million and is part of the financial sector and banking industry. Shares are up 9.6% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff
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