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 reiterated by TheStreet Ratings as a hold with a ratings score of C . The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and weak operating cash flow.
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Highlights from the ratings report include:
- Powered by its strong earnings growth of 121.11% and other important driving factors, this stock has surged by 33.18% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- BANK OF AMERICA 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, BANK OF AMERICA CORP continued to lose money by earning -$0.02 versus -$0.38 in the prior year. This year, the market expects an improvement in earnings ($0.56 versus -$0.02).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 18.9%. Since the same quarter one year prior, revenues fell by 18.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Net operating cash flow has significantly decreased to $18,356.00 million or 64.54% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- Although BAC's debt-to-equity ratio of 2.66 is very high, it is currently less than that of the industry average.
Bank of America Corporation, through its subsidiaries, provides various banking and financial products and services to individual consumers, small-and middle-market businesses, institutional investors, corporations, and governments in the United States and internationally. The company has a P/E ratio of 7, below the average banking industry P/E ratio of 9.5 and below the S&P 500 P/E ratio of 17.7. Bank of America has a market cap of $96.18 billion and is part of the
industry. Shares are up 60.5% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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