NEW YORK (
-- Towne Bank VA
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, good cash flow from operations, expanding profit margins and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Commercial Banks industry average. The net income increased by 16.8% when compared to the same quarter one year prior, going from $6.71 million to $7.83 million.
- The gross profit margin for TOWNEBANK is currently very high, coming in at 72.50%. 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 13.70% trails the industry average.
- Net operating cash flow has significantly increased by 586.43% to $94.28 million when compared to the same quarter last year. In addition, TOWNEBANK has also vastly surpassed the industry average cash flow growth rate of -340.81%.
- TOWNEBANK has improved earnings per share by 11.8% 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 year. We feel that this trend should continue. During the past fiscal year, TOWNEBANK increased its bottom line by earning $0.73 versus $0.66 in the prior year. This year, the market expects an improvement in earnings ($0.79 versus $0.73).
- TOWN's revenue growth has slightly outpaced the industry average of 6.2%. Since the same quarter one year prior, revenues slightly increased by 0.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
TowneBank, through its subsidiaries, provides retail and commercial banking products and services in the Greater Hampton Roads region in southeastern Virginia. The company operates in three segments: Banking, Realty, and Insurance. The company has a P/E ratio of 19.6, below the average banking industry P/E ratio of 19.8 and above the S&P 500 P/E ratio of 16.7. Towne Bank VA has a market cap of $412.3 million and is part of the
industry. Shares are down 9.1% year to date as of the close of trading on Monday.
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