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 robust revenue growth, good cash flow from operations and expanding profit margins. 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.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 38.6%. Since the same quarter one year prior, revenues rose by 27.3%. 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.
- Net operating cash flow has significantly increased by 92.35% to -$0.88 million when compared to the same quarter last year. In addition, FIRST CALIF FINL GROUP INC has also vastly surpassed the industry average cash flow growth rate of -4.40%.
- The gross profit margin for FIRST CALIF FINL GROUP INC is currently very high, coming in at 85.30%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, FCAL's net profit margin of 12.20% significantly trails the industry average.
- 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 83.4% when compared to the same quarter one year ago, falling from $15.59 million to $2.59 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, FIRST CALIF FINL GROUP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
First California Financial Group, Inc. operates as the holding company for First California Bank that provides commercial banking services to individuals, professionals, and small- to mid-sized business in California. The company has a P/E ratio of 25.4, below the average banking industry P/E ratio of 27.5 and above the S&P 500 P/E ratio of 17.7. First California Financial Group has a market cap of $200.8 million and is part of the
industry. Shares are up 110.1% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet Ratings Staff
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.