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) -- State Bank Financial (Nasdaq: STBZ) 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 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 exceeded that of the S&P 500 and the Commercial Banks industry average. The net income increased by 2.8% when compared to the same quarter one year prior, going from $9.09 million to $9.34 million.
- The gross profit margin for STATE BANK FINANCIAL CORP is currently very high, coming in at 87.70%. It has increased significantly from the same period last year. Along with this, the net profit margin of 21.05% is above that of the industry average.
- STATE BANK FINANCIAL CORP reported flat earnings per share in the most recent quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, STATE BANK FINANCIAL CORP reported lower earnings of $0.88 versus $1.32 in the prior year. This year, the market expects an improvement in earnings ($1.00 versus $0.88).
- STBZ, with its decline in revenue, underperformed when compared the industry average of 11.0%. Since the same quarter one year prior, revenues slightly dropped by 9.4%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Commercial Banks industry and the overall market, STATE BANK FINANCIAL 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