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) -- MetroCorp (Nasdaq: MCBI) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and reasonable valuation levels. However, as a counter to these strengths, we find that the stock has experienced relatively poor performance when compared with the S&P 500 during the past year.
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- Net operating cash flow has slightly increased to $4.40 million or 6.62% when compared to the same quarter last year. In addition, METROCORP BANCSHARES INC has also vastly surpassed the industry average cash flow growth rate of -60.08%.
- The gross profit margin for METROCORP BANCSHARES INC is currently very high, coming in at 89.50%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MCBI's net profit margin of 18.16% significantly trails the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.9%. Since the same quarter one year prior, revenues slightly dropped by 8.4%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Commercial Banks industry average, but is greater than that of the S&P 500. The net income increased by 9.3% when compared to the same quarter one year prior, going from $2.77 million to $3.03 million.
- 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. When compared to other companies in the Commercial Banks industry and the overall market, METROCORP BANCSHARES INC'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