NEW YORK ( TheStreet) -- Wintrust Financial (Nasdaq: WTFC) 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 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:
  • WTFC's revenue growth trails the industry average of 20.1%. Since the same quarter one year prior, revenues slightly increased by 4.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The gross profit margin for WINTRUST FINANCIAL CORP is rather high; currently it is at 63.70%. 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 6.50% trails the industry average.
  • WINTRUST FINANCIAL CORP reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, WINTRUST FINANCIAL CORP reported lower earnings of $1.07 versus $2.09 in the prior year. This year, the market expects an improvement in earnings ($1.70 versus $1.07).
  • Net operating cash flow has declined marginally to $24.56 million or 9.87% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • WTFC has underperformed the S&P 500 Index, declining 5.98% from its price level of one year ago. 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.

Wintrust Financial Corporation, through its subsidiaries, engages in community banking, specialty finance, and wealth management operations. The company has a P/E ratio of 30.3, equal to the average banking industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Wintrust Financial has a market cap of $1 billion and is part of the financial sector and banking industry. Shares are down 14.2% year to date as of the close of trading on Monday.

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