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 impressive record of earnings per share growth. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 16.3%. Since the same quarter one year prior, revenues slightly increased by 0.1%. 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 Commercial Banks industry. The net income increased by 143.0% when compared to the same quarter one year prior, rising from $0.52 million to $1.26 million.
- The gross profit margin for NORTH VALLEY BANCORP is currently very high, coming in at 84.10%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.60% trails the industry average.
- Powered by its strong earnings growth of 125.00% and other important driving factors, this stock has surged by 29.92% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- NORTH VALLEY BANCORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. 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, NORTH VALLEY BANCORP turned its bottom line around by earning $0.45 versus -$4.97 in the prior year. For the next year, the market is expecting a contraction of 2.2% in earnings ($0.44 versus $0.45).
North Valley Bancorp operates as a bank holding company North Valley Bank that provides commercial and retail banking services to businesses and middle income individuals in California. The company has a P/E ratio of 29.3, equal to the average banking industry P/E ratio and above the S&P 500 P/E ratio of 17.7. North Valley has a market cap of $92.3 million and is part of the
industry. Shares are up 44.1% year to date as of the close of trading on Thursday.
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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.