NEW YORK ( TheStreet) -- Umpqua Holdings Corporation (Nasdaq: UMPQ) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, expanding profit margins and increase in stock price during the past year. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • UMPQUA HOLDINGS CORP reported significant earnings per share improvement 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. During the past fiscal year, UMPQUA HOLDINGS CORP turned its bottom line around by earning $0.13 versus -$2.58 in the prior year. This year, the market expects an improvement in earnings ($0.65 versus $0.13).
  • 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 166.9% when compared to the same quarter one year prior, rising from $8.19 million to $21.86 million.
  • UMPQ's revenue growth trails the industry average of 23.3%. Since the same quarter one year prior, revenues slightly increased by 4.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for UMPQUA HOLDINGS CORP is currently very high, coming in at 78.50%. It has increased significantly from the same period last year. Along with this, the net profit margin of 14.40% is above that of the industry average.
  • After a year of stock price fluctuations, the net result is that UMPQ's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

Umpqua Holdings Corporation operates as the bank holding company for Umpqua Bank that provides commercial and retail banking services to corporate, institutional, and individual customers primarily in the areas of Oregon, northern California, and Washington. The company has a P/E ratio of 20.2, below the average banking industry P/E ratio of 22.6 and above the S&P 500 P/E ratio of 17.7. Umpqua has a market cap of $1.3 billion and is part of the financial sector and banking industry. Shares are down 6% year to date as of the close of trading on Tuesday.

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