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) -- BofI (Nasdaq: BOFI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, expanding profit margins, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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- BOFI's revenue growth has slightly outpaced the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 16.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the 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. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, BOFI HOLDING INC's return on equity exceeds that of both the industry average and the S&P 500.
- The gross profit margin for BOFI HOLDING INC is currently very high, coming in at 70.70%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.80% is above that of the industry average.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 57.47% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, BOFI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- BOFI HOLDING INC has improved earnings per share by 15.5% 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. During the past fiscal year, BOFI HOLDING INC increased its bottom line by earning $2.34 versus $1.88 in the prior year. This year, the market expects an improvement in earnings ($2.80 versus $2.34).
-- Written by a member of TheStreet Ratings Staff