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) -- First California Financial Group (Nasdaq: FCAL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- FCAL's revenue growth has slightly outpaced the industry average of 1.8%. Since the same quarter one year prior, revenues slightly increased by 7.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for FIRST CALIF FINL GROUP INC is currently very high, coming in at 90.70%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, FCAL's net profit margin of 0.17% significantly trails the industry average.
- Compared to its closing price of one year ago, FCAL's share price has jumped by 59.25%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- FIRST CALIF FINL GROUP INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, FIRST CALIF FINL GROUP INC reported lower earnings of $0.28 versus $0.73 in the prior year. This year, the market expects an improvement in earnings ($0.39 versus $0.28).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Banks industry. The net income has significantly decreased by 98.6% when compared to the same quarter one year ago, falling from $2.86 million to $0.04 million.
-- Written by a member of TheStreet Ratings Staff