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 impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- PACIFIC MERCANTILE 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. During the past fiscal year, PACIFIC MERCANTILE BANCORP turned its bottom line around by earning $0.96 versus -$1.44 in the prior year.
- 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 498.6% when compared to the same quarter one year prior, rising from -$1.97 million to $7.86 million.
- The gross profit margin for PACIFIC MERCANTILE BANCORP is currently very high, coming in at 86.50%. It has increased significantly from the same period last year. Along with this, the net profit margin of 59.50% significantly outperformed against the industry average.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, PACIFIC MERCANTILE BANCORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
Pacific Mercantile Bancorp operates as the holding company for Pacific Mercantile Bank that provides banking services to small and medium-size businesses, professionals, and the general public primarily in Orange, Los Angeles, San Bernardino, and San Diego counties of California. The company has a P/E ratio of 4.4, below the average banking industry P/E ratio of 67.4 and below the S&P 500 P/E ratio of 17.7. Pacific Mercantile has a market cap of $41.4 million and is part of the
industry. Shares are up 31.9% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet RatingsStaff