NEW YORK ( TheStreet) -- Ameris Bancorp (Nasdaq: ABCB) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and feeble growth in the company's earnings per share. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 2.6%. Since the same quarter one year prior, revenues rose by 22.4%. 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 AMERIS BANCORP is rather high; currently it is at 67.80%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, ABCB's net profit margin of 2.50% significantly trails the industry average.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Commercial Banks industry and the overall market, AMERIS BANCORP's return on equity is below that of both the industry average and the S&P 500.
- AMERIS BANCORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, AMERIS BANCORP turned its bottom line around by earning $0.75 versus -$0.40 in the prior year. For the next year, the market is expecting a contraction of 3.3% in earnings ($0.73 versus $0.75).
- 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 significantly decreased by 38.8% when compared to the same quarter one year ago, falling from $1.86 million to $1.14 million.