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) -- Hallmark Financial Services (Nasdaq: HALL) 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, good cash flow from operations and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
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- Since the same quarter one year prior, revenues rose by 12.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has increased to $5.83 million or 21.02% when compared to the same quarter last year.
- HALLMARK FINANCIAL SERVICES 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, HALLMARK FINANCIAL SERVICES turned its bottom line around by earning $0.18 versus -$0.53 in the prior year. This year, the market expects an improvement in earnings ($0.35 versus $0.18).
- The gross profit margin for HALLMARK FINANCIAL SERVICES is currently extremely low, coming in at 4.80%. Regardless of HALL's low profit margin, it has managed to increase from the same period last year.
-- Written by a member of TheStreet Ratings Staff