Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.
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Highlights from the ratings report include:
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 12.3%. Since the same quarter one year prior, revenues slightly dropped by 6.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for FIRST INTERNET BANCORP is currently very high, coming in at 76.54%. Regardless of INBK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 10.58% trails the industry average.
- 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 Commercial Banks industry and the overall market on the basis of return on equity, FIRST INTERNET BANCORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- FIRST INTERNET BANCORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, FIRST INTERNET BANCORP reported lower earnings of $1.54 versus $1.96 in the prior year. For the next year, the market is expecting a contraction of 50.1% in earnings ($0.77 versus $1.54).
- 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 42.9% when compared to the same quarter one year ago, falling from $1.71 million to $0.98 million.
First Internet Bancorp operates as the bank holding company for First Internet Bank of Indiana that provides online commercial and retail banking products and services in the United States. First Internet has a market cap of $79.1 million and is part of the financial sector and banking industry. Shares are down 21% year to date as of the close of trading on Wednesday.
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