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 (
-- BCB Bancorp
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 16.7%. Since the same quarter one year prior, revenues slightly increased by 5.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for BCB BANCORP INC is currently very high, coming in at 70.30%. Regardless of BCBP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BCBP's net profit margin of -23.40% significantly underperformed when compared to the industry average.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, BCB BANCORP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- Net operating cash flow has declined marginally to $4.50 million or 4.25% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
BCB Bancorp, Inc. operates as the holding company for BCB Community Bank that provides banking products and services in New Jersey. The company has a P/E ratio of 258.8, below the average banking industry P/E ratio of 345 and above the S&P 500 P/E ratio of 17.7. BCB has a market cap of $90.3 million and is part of the
industry. Shares are up 4.1% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet Ratings Staff