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) -- 1st United Bancorp (Nasdaq: FUBC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.
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- The revenue growth came in higher than the industry average of 8.7%. Since the same quarter one year prior, revenues slightly increased by 3.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 1ST UNITED BANCORP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, 1ST UNITED BANCORP INC increased its bottom line by earning $0.15 versus $0.12 in the prior year. This year, the market expects an improvement in earnings ($0.29 versus $0.15).
- The gross profit margin for 1ST UNITED BANCORP INC is currently very high, coming in at 90.20%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, FUBC's net profit margin of 9.68% significantly trails the industry average.
- 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. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, 1ST UNITED BANCORP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- Net operating cash flow has significantly decreased to $2.16 million or 68.11% when compared to the same quarter last year. Despite a decrease in cash flow 1ST UNITED BANCORP INC is still fairing well by exceeding its industry average cash flow growth rate of -100.32%.
-- Written by a member of TheStreet Ratings Staff