NEW YORK ( TheStreet) -- Simmons First National Corporation (Nasdaq: SFNC) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- The gross profit margin for SIMMONS FIRST NATL CP is currently very high, coming in at 83.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.10% is above that of the industry average.
- SFNC, with its decline in revenue, underperformed when compared the industry average of 3.3%. Since the same quarter one year prior, revenues slightly dropped by 8.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- SIMMONS FIRST NATL CP 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SIMMONS FIRST NATL CP reported lower earnings of $1.47 versus $2.15 in the prior year. This year, the market expects an improvement in earnings ($1.64 versus $1.47).
- Net operating cash flow has significantly decreased to $5.42 million or 73.03% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of SIMMONS FIRST NATL CP has not done very well: it is down 5.75% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
-- Written by a member of TheStreet Ratings Staff