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 good cash flow from operations, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and unimpressive growth in net income.
Highlights from the ratings report include:
- Net operating cash flow has increased to $4.42 million or 10.61% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -14.76%.
- The gross profit margin for ROMA FINANCIAL CORP is currently very high, coming in at 71.10%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, ROMA's net profit margin of 7.30% significantly 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. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, ROMA FINANCIAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, ROMA has underperformed the S&P 500 Index, declining 23.00% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Thrifts & Mortgage Finance industry average. The net income has decreased by 23.6% when compared to the same quarter one year ago, dropping from $1.85 million to $1.42 million.
Roma Financial Corporation operates as a holding company for Roma Bank and RomAsia Bank that provide traditional retail banking services primarily in New Jersey. The company has a P/E ratio of 37.3, equal to the average banking industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Roma Financial has a market cap of $248.9 million and is part of the
industry. Shares are down 17% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff