Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
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 robust revenue growth, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and premium valuation.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 2.2%. Since the same quarter one year prior, revenues rose by 20.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for BANCORP INC is rather high; currently it is at 62.32%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, TBBK's net profit margin of 0.55% is significantly lower than the industry average.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- Net operating cash flow has significantly decreased to -$135.83 million or 7501.90% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
The Bancorp, Inc. operates as the financial holding company for The Bancorp Bank that provides various commercial and retail, and related banking products and services to small and mid-size businesses, and their principals in the United States. Shares are down 12.9% year to date as of the close of trading on Friday.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.