Sierra Bancorp Stock Upgraded (BSRR)

NEW YORK ( TheStreet) -- Sierra Bancorp (Nasdaq: BSRR) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Commercial Banks industry average. The net income increased by 22.9% when compared to the same quarter one year prior, going from $1.53 million to $1.88 million.
  • The gross profit margin for SIERRA BANCORP/CA is currently very high, coming in at 77.60%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, BSRR's net profit margin of 10.60% significantly trails the industry average.
  • Despite the weak revenue results, BSRR has outperformed against the industry average of 25.7%. Since the same quarter one year prior, revenues slightly dropped by 1.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 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, SIERRA BANCORP/CA's return on equity is below that of both the industry average and the S&P 500.
  • SIERRA BANCORP/CA has improved earnings per share by 18.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, SIERRA BANCORP/CA reported lower earnings of $0.56 versus $0.62 in the prior year. For the next year, the market is expecting a contraction of 3.6% in earnings ($0.54 versus $0.56).

Sierra Bancorp operates as the bank holding company for Bank of the Sierra that provides retail and commercial banking services to communities in the central and southern sections of the San Joaquin Valley in California. The company has a P/E ratio of 17.8, above the average banking industry P/E ratio of 17.5 and above the S&P 500 P/E ratio of 17.7. Sierra has a market cap of $143.3 million and is part of the financial sector and banking industry. Shares are up 15.5% year to date as of the close of trading on Thursday.

You can view the full Sierra Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.