NEW YORK ( TheStreet) -- First Interstate Bancsystem (Nasdaq: FIBK) 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 and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow. Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 30.1%. Since the same quarter one year prior, revenues slightly increased by 1.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- FIRST INTERSTATE BANCSYSTEM has improved earnings per share by 30.0% 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, FIRST INTERSTATE BANCSYSTEM increased its bottom line by earning $0.96 versus $0.79 in the prior year. This year, the market expects an improvement in earnings ($1.11 versus $0.96).
- 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 28.5% when compared to the same quarter one year prior, rising from $9.51 million to $12.21 million.
- 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. When compared to other companies in the Commercial Banks industry and the overall market, FIRST INTERSTATE BANCSYSTEM's return on equity is below that of both the industry average and the S&P 500.
- After a year of stock price fluctuations, the net result is that FIBK'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. Despite the decline in its share price over the last year, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry. We feel, however, that other strengths this company displays compensate for this.
-- Written by a member of TheStreet Ratings Staff