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 Midwest Bancorp (Nasdaq: FMBI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- Powered by its strong earnings growth of 81.81% and other important driving factors, this stock has surged by 30.46% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- 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 85.5% when compared to the same quarter one year prior, rising from $7.89 million to $14.64 million.
- The gross profit margin for FIRST MIDWEST BANCORP INC is currently very high, coming in at 87.00%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, FMBI's net profit margin of 14.84% significantly trails the industry average.
- FIRST MIDWEST BANCORP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FIRST MIDWEST BANCORP INC swung to a loss, reporting -$0.27 versus $0.35 in the prior year. This year, the market expects an improvement in earnings ($0.89 versus -$0.27).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.3%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
-- Written by a member of TheStreet Ratings Staff