First California Financial Group Inc. Stock Upgraded (FCAL)

NEW YORK ( TheStreet) -- First California Financial Group (Nasdaq: FCAL) 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, increase in net income, expanding profit margins, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 16.3%. Since the same quarter one year prior, revenues slightly increased by 6.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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 31.8% when compared to the same quarter one year prior, rising from $2.42 million to $3.19 million.
  • The gross profit margin for FIRST CALIF FINL GROUP INC is currently very high, coming in at 87.20%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 13.80% trails the industry average.
  • Powered by its strong earnings growth of 42.85% and other important driving factors, this stock has surged by 106.47% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • FIRST CALIF FINL GROUP INC has improved earnings per share by 42.9% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, FIRST CALIF FINL GROUP INC turned its bottom line around by earning $0.73 versus -$0.01 in the prior year. For the next year, the market is expecting a contraction of 42.5% in earnings ($0.42 versus $0.73).

First California Financial Group, Inc. operates as the holding company for First California Bank that provides commercial banking services to individuals, professionals, and small- to mid-sized business in California. The company has a P/E ratio of 25.6, above the average banking industry P/E ratio of 24.6 and above the S&P 500 P/E ratio of 17.7. First California Financial Group has a market cap of $201.7 million and is part of the financial sector and banking industry. Shares are up 111.7% year to date as of the close of trading on Tuesday.

You can view the full First California Financial Group 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.
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