Editor's Note: 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
NEW YORK (
) has been downgraded by TheStreet Ratings from buy to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and feeble growth in its earnings per share.
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Highlights from the ratings report include:
- 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 Thrifts & Mortgage Finance industry. The net income has significantly decreased by 157.8% when compared to the same quarter one year ago, falling from $0.56 million to -$0.32 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, PEOPLES FEDERAL BANCSHS INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- PEOPLES FEDERAL BANCSHS INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, PEOPLES FEDERAL BANCSHS INC reported lower earnings of $0.26 versus $0.47 in the prior year. This year, the market expects an improvement in earnings ($0.48 versus $0.26).
- Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
- The gross profit margin for PEOPLES FEDERAL BANCSHS INC is currently very high, coming in at 83.20%. 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 -5.70% is in-line with the industry average.
Peoples Federal Bancshares, Inc. operates as a holding company for Peoples Federal Savings Bank that provides financial services to individuals and small businesses. The company has a P/E ratio of 63.3, above the S&P 500 P/E ratio of 17.7. Peoples Federal has a market cap of $110.7 million and is part of the financial sector and banking industry. Shares are up 15.4% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff
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