NEW YORK ( TheStreet) -- Hudson Valley (NYSE: HVB) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.
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- The gross profit margin for HUDSON VALLEY HOLDING CORP is currently very high, coming in at 89.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.50% is above that of the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 16.3%. Since the same quarter one year prior, revenues fell by 12.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- HUDSON VALLEY HOLDING CORP's earnings per share declined by 34.5% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, HUDSON VALLEY HOLDING CORP swung to a loss, reporting -$0.12 versus $0.27 in the prior year. This year, the market expects an improvement in earnings ($1.26 versus -$0.12).
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, HUDSON VALLEY HOLDING CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The share price of HUDSON VALLEY HOLDING CORP has not done very well: it is down 18.93% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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