NEW YORK ( TheStreet) -- MutualFirst Financial Inc (Nasdaq: MFSF) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • The gross profit margin for MUTUALFIRST FINANCIAL INC is rather high; currently it is at 63.80%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 8.80% trails the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • MUTUALFIRST FINANCIAL INC's earnings per share declined by 5.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, MUTUALFIRST FINANCIAL INC increased its bottom line by earning $0.69 versus $0.21 in the prior year. For the next year, the market is expecting a contraction of 42.8% in earnings ($0.40 versus $0.69).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Thrifts & Mortgage Finance industry. The net income has decreased by 5.3% when compared to the same quarter one year ago, dropping from $1.78 million to $1.68 million.

MutualFirst Financial, Inc. operates as a holding company for MutualBank that provides financial products services to individuals and businesses. It accepts various savings deposit accounts, NOW and demand accounts, and certificates of deposit. The company has a P/E ratio of 20.6, above the average banking industry P/E ratio of 20.1 and above the S&P 500 P/E ratio of 17.7. MutualFirst Financial has a market cap of $54.7 million and is part of the financial sector and banking industry. Shares are down 16.6% year to date as of the close of trading on Tuesday.

You can view the full MutualFirst Financial Ratings Report or get investment ideas from our investment research center.
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