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) -- First PacTrust Bancorp (Nasdaq: BANC) 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, good cash flow from operations, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- The revenue growth came in higher than the industry average of 9.8%. Since the same quarter one year prior, revenues slightly increased by 8.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 330.34% to $2.57 million when compared to the same quarter last year. In addition, FIRST PACTRUST BANCORP has also vastly surpassed the industry average cash flow growth rate of -134.79%.
- The gross profit margin for FIRST PACTRUST BANCORP is currently very high, coming in at 79.80%. Regardless of BANC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BANC's net profit margin of -6.70% significantly underperformed when compared to the industry average.
- FIRST PACTRUST BANCORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, FIRST PACTRUST BANCORP swung to a loss, reporting -$0.25 versus $0.31 in the prior year. This year, the market expects an improvement in earnings ($0.30 versus -$0.25).
- In its most recent trading session, BANC has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
-- Written by a member of TheStreet Ratings Staff