NEW YORK ( TheStreet) -- First Citizens BancShares Inc (DE (Nasdaq: FCNCA) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- FCNCA's revenue growth trails the industry average of 20.1%. Since the same quarter one year prior, revenues slightly increased by 0.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $124.76 million or 40.63% when compared to the same quarter last year. Despite an increase in cash flow, FIRST CITIZENS BANCSH's average is still marginally south of the industry average growth rate of 46.13%.
- The gross profit margin for FIRST CITIZENS BANCSH is currently very high, coming in at 70.50%. Regardless of FCNCA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.80% trails the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Banks industry. The net income has significantly decreased by 25.5% when compared to the same quarter one year ago, falling from $28.60 million to $21.30 million.
- The share price of FIRST CITIZENS BANCSH has not done very well: it is down 18.32% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.