NEW YORK ( TheStreet) -- First California Financial Group (Nasdaq: FCAL) 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, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 23.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Powered by its strong earnings growth of 400.00% and other important driving factors, this stock has surged by 32.93% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The gross profit margin for FIRST CALIF FINL GROUP INC is currently very high, coming in at 77.90%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, FCAL's net profit margin of 12.00% significantly trails the industry average.
- Net operating cash flow has increased to $6.44 million or 12.57% when compared to the same quarter last year. Despite an increase in cash flow of 12.57%, FIRST CALIF FINL GROUP INC is still growing at a significantly lower rate than the industry average of 1310.31%.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Commercial Banks industry and the overall market, FIRST CALIF FINL GROUP INC's return on equity is below that of both the industry average and the S&P 500.