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 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 unimpressive growth in net income, relatively poor performance when compared with the S&P 500 during the past year and feeble growth in the company's earnings per share.
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Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 662.16% to $234.74 million when compared to the same quarter last year. In addition, UMPQUA HOLDINGS CORP has also vastly surpassed the industry average cash flow growth rate of -60.08%.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.9%. Since the same quarter one year prior, revenues slightly dropped by 3.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The gross profit margin for UMPQUA HOLDINGS CORP is currently very high, coming in at 87.50%. Regardless of UMPQ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, UMPQ's net profit margin of 16.88% is significantly lower than the industry average.
- In its most recent trading session, UMPQ has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
- 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 Commercial Banks industry average. The net income has decreased by 8.4% when compared to the same quarter one year ago, dropping from $25.50 million to $23.36 million.
Umpqua Holdings Corporation operates as the holding company for Umpqua Bank and Umpqua Investments, Inc. that provide commercial, and retail banking and brokerage services to corporate, institutional, and individual customers in the United States. The company has a P/E ratio of 15.5, below the S&P 500 P/E ratio of 17.7. Umpqua has a market cap of $1.52 billion 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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