Western Alliance Bancorporation Stock Upgraded (WAL)

NEW YORK ( TheStreet) -- Western Alliance (NYSE: WAL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • WAL's revenue growth has slightly outpaced the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 5.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • WESTERN ALLIANCE BANCORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WESTERN ALLIANCE BANCORP turned its bottom line around by earning $0.21 versus -$0.19 in the prior year. This year, the market expects an improvement in earnings ($0.60 versus $0.21).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 119.3% when compared to the same quarter one year prior, rising from $5.15 million to $11.30 million.
  • The gross profit margin for WESTERN ALLIANCE BANCORP is currently very high, coming in at 75.40%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.60% is above that of 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. Although other factors naturally played a role, the company's strong earnings growth was key. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

Western Alliance Bancorporation, a multi-bank holding company, provides various banking and related services to businesses, professional firms, real estate developers and investors, non-profit organizations, high net worth individuals, and other consumers in Nevada, Arizona, and California. The company has a P/E ratio of 20.7, below the average banking industry P/E ratio of 45.7 and above the S&P 500 P/E ratio of 17.7. Western Alliance has a market cap of $722.4 million and is part of the financial sector and banking industry. Shares are up 41.4% year to date as of the close of trading on Monday.

You can view the full Western Alliance Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet RatingsStaff