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) -- Firstbank Corp Michigan (Nasdaq: FBMI) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.
- ACTIVE STOCK TRADERS: Get full access to Jim Cramer's thoughts for less than $3/week - sometimes before he says them on TV! Start with a 14-Day Free Trial.
- Powered by its strong earnings growth of 733.33% and other important driving factors, this stock has surged by 110.46% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although FBMI had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- FIRSTBANK CORP 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. This trend suggests that the performance of the business is improving. During the past fiscal year, FIRSTBANK CORP increased its bottom line by earning $0.50 versus $0.27 in the prior year. This year, the market expects an improvement in earnings ($0.88 versus $0.50).
- The gross profit margin for FIRSTBANK CORP is currently very high, coming in at 75.30%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 12.70% trails the industry average.
- Despite the weak revenue results, FBMI has outperformed against the industry average of 16.3%. Since the same quarter one year prior, revenues slightly dropped by 1.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Commercial Banks industry and the overall market, FIRSTBANK CORP's return on equity is below that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff