NEW YORK ( TheStreet) -- First California Financial Group (Nasdaq: FCAL) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that revenues have generally been declining. Highlights from the ratings report include:
- 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, FIRST CALIF FINL GROUP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- FCAL, with its decline in revenue, underperformed when compared the industry average of 4.5%. Since the same quarter one year prior, revenues slightly dropped by 7.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for FIRST CALIF FINL GROUP INC is currently very high, coming in at 71.40%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.50% trails the industry average.
- FIRST CALIF FINL GROUP INC reported significant earnings per share improvement 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. This trend suggests that the performance of the business is improving. During the past fiscal year, FIRST CALIF FINL GROUP INC continued to lose money by earning -$0.01 versus -$0.50 in the prior year. This year, the market expects an improvement in earnings ($0.27 versus -$0.01).
- Powered by its strong earnings growth of 111.11% and other important driving factors, this stock has surged by 30.87% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.