NEW YORK ( TheStreet) -- Citizens and Northern Corporation (Nasdaq: CZNC) 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, solid stock price performance, impressive record of earnings per share growth, good cash flow from operations and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The gross profit margin for CITIZENS & NORTHERN CORP is currently very high, coming in at 81.50%. 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 26.80% trails the industry average.
  • Net operating cash flow has significantly increased by 105.31% to $12.95 million when compared to the same quarter last year. In addition, CITIZENS & NORTHERN CORP has also vastly surpassed the industry average cash flow growth rate of -95.13%.
  • CITIZENS & NORTHERN CORP has improved earnings per share by 32.4% 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. We feel that this trend should continue. During the past fiscal year, CITIZENS & NORTHERN CORP turned its bottom line around by earning $1.45 versus -$4.58 in the prior year. This year, the market expects an improvement in earnings ($1.69 versus $1.45).
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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 revenue growth came in higher than the industry average of 1.6%. Since the same quarter one year prior, revenues slightly increased by 9.3%. Growth in the company's revenue appears to have helped boost the earnings per share.

Citizens & Northern Corporation operates as the holding for Citizens & Northern Bank and First State Bank, which provide various banking and mortgage products and services to individual and corporate customers in north central Pennsylvania and southern New York. The company has a P/E ratio of 10, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Citizens and Northern has a market cap of $190.5 million and is part of the financial sector and banking industry. Shares are up 10.4% year to date as of the close of trading on Friday.

You can view the full Citizens and Northern Ratings Report or get investment ideas from our investment research center.

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