Preferred Bank Stock Upgraded (PFBC)

NEW YORK ( TheStreet) -- Preferred Bank (Nasdaq: PFBC) 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, notable return on equity, solid stock price performance, compelling growth in net income and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.6%. Since the same quarter one year prior, revenues rose by 11.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Commercial Banks industry and the overall market, PREFERRED BANK LOS ANGELES's return on equity exceeds that of both the industry average and the S&P 500.
  • Powered by its strong earnings growth of 3280.00% and other important driving factors, this stock has surged by 49.68% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, PFBC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • 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 3089.3% when compared to the same quarter one year prior, rising from $0.70 million to $22.29 million.
  • The gross profit margin for PREFERRED BANK LOS ANGELES is currently very high, coming in at 74.70%. Regardless of PFBC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PFBC's net profit margin of 141.00% significantly outperformed against the industry.
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Preferred Bank operates as a commercial bank in California. The company provides a range of deposit and loan products and services to small and mid-sized businesses and their owners, entrepreneurs, real estate developers and investors, professionals, and high net worth individuals. The company has a P/E ratio of 12.8, below the S&P 500 P/E ratio of 17.7. Preferred has a market cap of $156.9 million and is part of the financial sector and banking industry. Shares are up 59.7% year to date as of the close of trading on Thursday.

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