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 (
-- Cape 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, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 10.2%. Since the same quarter one year prior, revenues slightly increased by 0.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Thrifts & Mortgage Finance industry. The net income increased by 66.1% when compared to the same quarter one year prior, rising from $0.62 million to $1.03 million.
- The gross profit margin for CAPE BANCORP INC is currently very high, coming in at 73.60%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, CBNJ's net profit margin of 8.00% significantly trails the industry average.
- Net operating cash flow has decreased to $1.05 million or 45.06% when compared to the same quarter last year. Despite a decrease in cash flow of 45.06%, CAPE BANCORP INC is still significantly exceeding the industry average of -145.70%.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, CAPE BANCORP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
Cape Bancorp, Inc. operates as the holding company for the Cape Bank that provides a line of business and personal banking products to retail customers and small and mid-sized businesses primarily in Cape May and Atlantic Counties, New Jersey. The company has a P/E ratio of 66.9, below the average banking industry P/E ratio of 78 and above the S&P 500 P/E ratio of 17.7. Cape has a market cap of $124.6 million and is part of the
industry. Shares are up 20% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet Ratings Staff
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