NEW YORK ( TheStreet) -- Astoria Financial Corporation (NYSE: AF) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • ASTORIA FINANCIAL CORP has improved earnings per share by 5.9% 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ASTORIA FINANCIAL CORP increased its bottom line by earning $0.79 versus $0.31 in the prior year. This year, the market expects an improvement in earnings ($0.88 versus $0.79).
  • The gross profit margin for ASTORIA FINANCIAL CORP is rather high; currently it is at 52.60%. 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 8.60% trails the industry average.
  • Net operating cash flow has slightly increased to $23.04 million or 3.28% when compared to the same quarter last year. Despite an increase in cash flow of 3.28%, ASTORIA FINANCIAL CORP is still growing at a significantly lower rate than the industry average of 975.71%.
  • AF, with its decline in revenue, slightly underperformed the industry average of 13.1%. Since the same quarter one year prior, revenues fell by 18.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • AF has underperformed the S&P 500 Index, declining 21.30% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

Astoria Financial Corporation operates as the bank holding company for Astoria Federal Savings and Loan Association that provides various banking services in the United States. It primarily engages in generating deposits and originating loans. The company has a P/E ratio of 9.7, above the average banking industry P/E ratio of 9.6 and below the S&P 500 P/E ratio of 17.7. Astoria Financial has a market cap of $898.7 million and is part of the financial sector and banking industry. Shares are down 32.5% year to date as of the close of trading on Wednesday.

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

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