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) -- OBA Financial Services (Nasdaq: OBAF) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins, solid stock price performance, impressive record of earnings per share growth and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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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 384.1% when compared to the same quarter one year prior, rising from $0.08 million to $0.40 million.
- The gross profit margin for OBA FINANCIAL SERVICES INC is currently very high, coming in at 86.50%. 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 9.54% trails the industry average.
- Powered by its strong earnings growth of 400.00% and other important driving factors, this stock has surged by 32.04% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 0.8%. Since the same quarter one year prior, revenues slightly dropped by 0.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- OBA FINANCIAL SERVICES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, OBA FINANCIAL SERVICES INC reported lower earnings of $0.07 versus $0.21 in the prior year.
-- Written by a member of TheStreet Ratings Staff