NEW YORK ( TheStreet) -- Investors Bancorp Inc (Nasdaq: ISBC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth and expanding profit margins. However, as a counter to these strengths, we find that the stock itself is trading at a premium valuation. Highlights from the ratings report include:
- INVESTORS BANCORP INC has improved earnings per share by 28.6% 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, INVESTORS BANCORP INC increased its bottom line by earning $0.57 versus $0.22 in the prior year. This year, the market expects an improvement in earnings ($0.72 versus $0.57).
- Despite its growing revenue, the company underperformed as compared with the industry average of 20.2%. Since the same quarter one year prior, revenues rose by 12.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. 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 net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Commercial Banks industry average. The net income increased by 28.4% when compared to the same quarter one year prior, rising from $15.28 million to $19.62 million.