NEW YORK ( TheStreet) -- Monarch Financial Holdings (Nasdaq: MNRK) 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, expanding profit margins, notable return on equity and compelling growth in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- MONARCH FINANCIAL HLDGS INC has improved earnings per share by 31.6% 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 two years. We feel that this trend should continue. During the past fiscal year, MONARCH FINANCIAL HLDGS INC increased its bottom line by earning $0.75 versus $0.67 in the prior year. This year, the market expects an improvement in earnings ($0.81 versus $0.75).
- The gross profit margin for MONARCH FINANCIAL HLDGS INC is currently very high, coming in at 87.00%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MNRK's net profit margin of 8.10% significantly trails the industry average.
- MNRK, with its decline in revenue, slightly underperformed the industry average of 2.2%. Since the same quarter one year prior, revenues slightly dropped by 3.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Commercial Banks industry and the overall market, MONARCH FINANCIAL HLDGS INC's return on equity is below that of both the industry average and the S&P 500.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Commercial Banks industry average, but is greater than that of the S&P 500. The net income increased by 41.5% when compared to the same quarter one year prior, rising from $1.51 million to $2.14 million.