NEW YORK ( TheStreet) -- Zions (Nasdaq: ZION) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, 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.
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- ZIONS BANCORPORATION 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. During the past fiscal year, ZIONS BANCORPORATION turned its bottom line around by earning $0.83 versus -$2.50 in the prior year. This year, the market expects an improvement in earnings ($1.28 versus $0.83).
- 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 25.9% when compared to the same quarter one year prior, rising from $72.88 million to $91.74 million.
- The gross profit margin for ZIONS BANCORPORATION is currently very high, coming in at 84.90%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, ZION's net profit margin of 14.30% significantly trails the industry average.
- Despite the weak revenue results, ZION has outperformed against the industry average of 30.8%. Since the same quarter one year prior, revenues slightly dropped by 6.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, ZIONS BANCORPORATION underperformed against that of the industry average and is significantly less than that of the S&P 500.
-- Written by a member of TheStreet Ratings Staff