NEW YORK ( TheStreet) -- Intervest Bancshares Corporation (Nasdaq: IBCA) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 105.6% when compared to the same quarter one year prior, rising from -$51.45 million to $2.89 million.
- 44.70% is the gross profit margin for INTERVEST BANCSHARES CORP which we consider to be strong. 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 11.60% trails the industry average.
- INTERVEST BANCSHARES CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, INTERVEST BANCSHARES CORP swung to a loss, reporting -$6.42 versus $0.18 in the prior year. This year, the market expects an improvement in earnings ($0.40 versus -$6.42).
- In its most recent trading session, IBCA has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- Net operating cash flow has decreased to $14.89 million or 37.15% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, INTERVEST BANCSHARES CORP has marginally lower results.