NEW YORK ( TheStreet) -- Hancock Holding Company (Nasdaq: HBHC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and increase 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:
- HBHC's very impressive revenue growth greatly exceeded the industry average of 3.3%. Since the same quarter one year prior, revenues leaped by 117.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for HANCOCK HOLDING CO is currently very high, coming in at 88.60%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, HBHC's net profit margin of 11.60% significantly trails the industry average.
- HANCOCK HOLDING CO's earnings per share declined by 10.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, HANCOCK HOLDING CO reported lower earnings of $1.40 versus $2.23 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $1.40).
- 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 104.5% when compared to the same quarter one year prior, rising from $14.85 million to $30.38 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, HANCOCK HOLDING CO underperformed against that of the industry average and is significantly less than that of the S&P 500.