NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, expanding profit margins, solid stock price performance and notable return on equity. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
Highlights from the ratings report include:
- HEOP's revenue growth has slightly outpaced the industry average of 2.6%. Since the same quarter one year prior, revenues slightly increased by 6.8%. Growth in the company's revenue appears to have helped boost 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 Commercial Banks industry. The net income increased by 699.0% when compared to the same quarter one year prior, rising from $0.52 million to $4.13 million.
- The gross profit margin for HERITAGE OAKS BANCORP is currently very high, coming in at 88.20%. 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 27.10% trails the industry average.
- This stock has managed to rise its share value by 7.04% over the past twelve months. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- HERITAGE OAKS BANCORP has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, HERITAGE OAKS BANCORP turned its bottom line around by earning $0.25 versus -$1.53 in the prior year. This year, the market expects earnings to be in line with last year ($0.25 versus $0.25).
Heritage Oaks Bancorp operates as the holding company for Heritage Oaks Bank that provides commercial banking services to retail customers, and small to medium-sized businesses in California. The company has a P/E ratio of 10.6, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Heritage Oaks has a market cap of $91.8 million and is part of the
industry. Shares are up 7.3% year to date as of the close of trading on Monday.
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