NEW YORK (
-- The Bancorp
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and expanding profit margins. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.
Highlights from the ratings report include:
- 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 62.2% when compared to the same quarter one year prior, rising from $0.41 million to $0.66 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 20.6%. Since the same quarter one year prior, revenues rose by 13.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- The gross profit margin for BANCORP INC is rather high; currently it is at 65.10%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, TBBK's net profit margin of 2.30% 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 Commercial Banks industry and the overall market on the basis of return on equity, BANCORP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- Net operating cash flow has significantly decreased to $1.82 million or 79.67% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
The Bancorp, Inc. operates as the holding company for The Bancorp Bank that provides various commercial and retail banking and related products and services to small and mid-size businesses and their principals. The company has a P/E ratio of 37, above the average banking industry P/E ratio of 35.4 and above the S&P 500 P/E ratio of 17.7. The has a market cap of $258.3 million and is part of the
industry. Shares are down 28.2% year to date as of the close of trading on Friday.
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