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 expanding profit margins, reasonable valuation levels and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and weak operating cash flow.
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Highlights from the ratings report include:
- The gross profit margin for WESTFIELD FINANCIAL INC is currently very high, coming in at 70.90%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, WFD's net profit margin of 8.20% significantly trails the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.0%. Since the same quarter one year prior, revenues slightly dropped by 4.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- WESTFIELD FINANCIAL INC's earnings per share declined by 33.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, WESTFIELD FINANCIAL INC increased its bottom line by earning $0.23 versus $0.12 in the prior year. This year, the market expects earnings to be in line with last year ($0.23 versus $0.23).
- Net operating cash flow has decreased to $2.33 million or 44.76% when compared to the same quarter last year. Despite a decrease in cash flow WESTFIELD FINANCIAL INC is still fairing well by exceeding its industry average cash flow growth rate of -78.90%.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Thrifts & Mortgage Finance industry. The net income has significantly decreased by 37.8% when compared to the same quarter one year ago, falling from $1.57 million to $0.97 million.
Westfield Financial, Inc. operates as a bank holding company for the Westfield Bank that provides various community banking products and services to businesses and individuals in Massachusetts. The company has a P/E ratio of 32.2, above the average banking industry P/E ratio of 30.3 and above the S&P 500 P/E ratio of 17.7. Westfield Financial has a market cap of $201.6 million and is part of the
industry. Shares are up 5.2% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet Ratings Staff