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) -- Westamerica (Nasdaq: WABC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins, notable return on equity and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and premium valuation.
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- The gross profit margin for WESTAMERICA BANCORPORATION is currently very high, coming in at 93.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 33.40% significantly outperformed against the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 17.9%. Since the same quarter one year prior, revenues fell by 10.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Commercial Banks industry average. The net income has decreased by 10.7% when compared to the same quarter one year ago, dropping from $22.43 million to $20.02 million.
-- Written by a member of TheStreet Ratings Staff