NEW YORK ( TheStreet) -- Westfield Financial (Nasdaq: WFD) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 18.8%. Since the same quarter one year prior, revenues slightly increased by 8.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The gross profit margin for WESTFIELD FINANCIAL INC is currently very high, coming in at 73.50%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.60% is above that of the industry average.
- WESTFIELD FINANCIAL INC 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, WESTFIELD FINANCIAL INC increased its bottom line by earning $0.23 versus $0.12 in the prior year. This year, the market expects earnings to be in line with last year ($0.23 versus $0.23).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, WESTFIELD FINANCIAL INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- WFD has underperformed the S&P 500 Index, declining 17.82% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
-- Written by a member of TheStreet Ratings Staff