NEW YORK ( TheStreet) -- Washington Federal (Nasdaq: WFSL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins and growth in earnings per share. 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 net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Thrifts & Mortgage Finance industry. The net income increased by 92.1% when compared to the same quarter one year prior, rising from $15.96 million to $30.67 million.
- The gross profit margin for WASHINGTON FED INC is rather high; currently it is at 54.10%. It has increased significantly from the same period last year. Along with this, the net profit margin of 20.20% is above that of the industry average.
- WASHINGTON FED INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, WASHINGTON FED INC reported lower earnings of $1.00 versus $1.05 in the prior year. This year, the market expects an improvement in earnings ($1.21 versus $1.00).
- Despite the weak revenue results, WFSL has outperformed against the industry average of 23.4%. Since the same quarter one year prior, revenues slightly dropped by 1.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- 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 Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, WASHINGTON FED INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.