NEW YORK ( TheStreet) -- First Financial Bankshares (Nasdaq: FFIN) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 2.5%. Since the same quarter one year prior, revenues slightly increased by 7.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • FIRST FINL BANKSHARES INC has improved earnings per share by 18.8% 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, FIRST FINL BANKSHARES INC increased its bottom line by earning $1.87 versus $1.72 in the prior year. This year, the market expects an improvement in earnings ($2.17 versus $1.87).
  • The gross profit margin for FIRST FINL BANKSHARES INC is currently very high, coming in at 94.10%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 33.40% trails the industry average.
  • Net operating cash flow has increased to $24.72 million or 13.99% when compared to the same quarter last year. Despite an increase in cash flow of 13.99%, FIRST FINL BANKSHARES INC is still growing at a significantly lower rate than the industry average of 317.31%.
  • 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. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, FIRST FINL BANKSHARES INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

First Financial Bankshares, Inc., through its subsidiaries, provides commercial banking products and services primarily in Texas. The company has a P/E ratio of 15.2, below the average banking industry P/E ratio of 15.3 and below the S&P 500 P/E ratio of 17.7. First Financial has a market cap of $1 billion and is part of the financial sector and banking industry. Shares are down 8.3% year to date as of the close of trading on Wednesday.

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