NEW YORK ( TheStreet) -- Bridge Capital Holdings (Nasdaq: BBNK) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including premium valuation and weak operating cash flow. Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 30.7%. Since the same quarter one year prior, revenues rose by 25.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- BRIDGE CAPITAL HOLDINGS 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. This trend suggests that the performance of the business is improving. During the past fiscal year, BRIDGE CAPITAL HOLDINGS increased its bottom line by earning $0.52 versus $0.01 in the prior year. This year, the market expects an improvement in earnings ($0.80 versus $0.52).
- Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 26.80% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- Net operating cash flow has significantly decreased to -$7.36 million or 129.22% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
-- Written by a member of TheStreet Ratings Staff