Editor's Note: 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 NEW YORK ( TheStreet) -- Valley National Bancorp (NYSE: VLY) 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 VALLEY NATIONAL BANCORP is currently very high, coming in at 72.70%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.20% is above that of the industry average.
- Despite the weak revenue results, VLY has outperformed against the industry average of 16.4%. Since the same quarter one year prior, revenues slightly dropped by 5.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- VALLEY NATIONAL BANCORP's earnings per share declined by 18.9% 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, VALLEY NATIONAL BANCORP increased its bottom line by earning $0.76 versus $0.74 in the prior year. For the next year, the market is expecting a contraction of 9.3% in earnings ($0.69 versus $0.76).
- Net operating cash flow has decreased to $19.76 million or 38.49% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, VLY has underperformed the S&P 500 Index, declining 10.21% from its price level of one year ago. 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