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 revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.
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Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 24.9%. Since the same quarter one year prior, revenues rose by 15.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 294.44% and other important driving factors, this stock has surged by 57.42% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although HTLF had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- The gross profit margin for HEARTLAND FINANCIAL USA INC is currently very high, coming in at 82.20%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 18.40% trails the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Commercial Banks industry and the overall market, HEARTLAND FINANCIAL USA INC's return on equity is below that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$30.01 million or 2615.08% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Heartland Financial USA, Inc., through its bank subsidiaries, provides commercial and retail banking services to businesses and individuals. The company has a P/E ratio of 12.7, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Heartland Financial USA has a market cap of $367.5 million and is part of the
industry. Shares are up 46.5% 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.