NEW YORK ( TheStreet) -- Pacific Continental (Nasdaq: PCBK) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, impressive record of earnings per share growth and good cash flow from operations. 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 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 87.4% when compared to the same quarter one year prior, rising from $1.45 million to $2.72 million.
- PACIFIC CONTINENTAL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, PACIFIC CONTINENTAL CORP increased its bottom line by earning $0.29 versus $0.28 in the prior year. This year, the market expects an improvement in earnings ($0.60 versus $0.29).
- Net operating cash flow has increased to $7.86 million or 10.88% when compared to the same quarter last year. Despite an increase in cash flow of 10.88%, PACIFIC CONTINENTAL CORP is still growing at a significantly lower rate than the industry average of 710.34%.
- 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 Commercial Banks industry and the overall market on the basis of return on equity, PACIFIC CONTINENTAL CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- After a year of stock price fluctuations, the net result is that PCBK's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. 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