NEW YORK ( TheStreet) -- Northrim BanCorp (Nasdaq: NRIM) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, increase in stock price during the past year, impressive record of earnings per share growth, notable return on equity and compelling growth in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook. Highlights from the ratings report include:
- NRIM, with its decline in revenue, slightly underperformed the industry average of 6.2%. Since the same quarter one year prior, revenues slightly dropped by 7.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- 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, NORTHRIM BANCORP INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- NORTHRIM BANCORP INC has improved earnings per share by 27.6% 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, NORTHRIM BANCORP INC increased its bottom line by earning $1.39 versus $1.20 in the prior year. This year, the market expects earnings to be in line with last year ($1.39 versus $1.39).
- 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. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The gross profit margin for NORTHRIM BANCORP INC is currently very high, coming in at 89.40%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.00% is above that of the industry average.