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 upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 48.4% when compared to the same quarter one year prior, rising from $24.82 million to $36.83 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.0%. Since the same quarter one year prior, revenues slightly increased by 9.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The gross profit margin for VALLEY NATIONAL BANCORP is currently very high, coming in at 74.80%. 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 18.71% trails the industry average.
- VALLEY NATIONAL BANCORP has improved earnings per share by 33.0% 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 reported lower earnings of $0.74 versus $0.76 in the prior year. For the next year, the market is expecting a contraction of 6.2% in earnings ($0.70 versus $0.74).
- VLY has underperformed the S&P 500 Index, declining 13.77% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.
-- Written by a member of TheStreet Ratings Staff