NEW YORK ( TheStreet) -- Westamerica (Nasdaq: WABC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins 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 gross profit margin for WESTAMERICA BANCORPORATION is currently very high, coming in at 92.80%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 33.40% is above that of the industry average.
- WABC, with its decline in revenue, slightly underperformed the industry average of 2.5%. Since the same quarter one year prior, revenues slightly dropped by 4.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing 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 Commercial Banks industry and the overall market, WESTAMERICA BANCORPORATION's return on equity exceeds that of both the industry average and the S&P 500.
- WESTAMERICA BANCORPORATION' earnings per share from the most recent quarter came in slightly below the year earlier quarter. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, WESTAMERICA BANCORPORATION reported lower earnings of $3.22 versus $4.15 in the prior year. For the next year, the market is expecting a contraction of 4.0% in earnings ($3.09 versus $3.22).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Banks industry. The net income has decreased by 5.4% when compared to the same quarter one year ago, dropping from $23.71 million to $22.43 million.