NEW YORK ( TheStreet) -- Macatawa Bank Corporation (Nasdaq: MCBC) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and feeble growth in the company's earnings per share. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Commercial Banks industry average. The net income increased by 30.1% when compared to the same quarter one year prior, rising from $0.84 million to $1.09 million.
- The gross profit margin for MACATAWA BANK CORP is currently very high, coming in at 82.90%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.00% trails the industry average.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- MACATAWA BANK CORP's earnings per share declined by 20.0% in the most recent quarter compared to 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, MACATAWA BANK CORP turned its bottom line around by earning $0.28 versus -$1.00 in the prior year. For the next year, the market is expecting a contraction of 67.8% in earnings ($0.09 versus $0.28).
- Net operating cash flow has decreased to $6.13 million or 41.17% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
-- Written by a member of TheStreet RatingsStaff