NEW YORK ( TheStreet) -- Westamerica (Nasdaq: WABC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- The gross profit margin for WESTAMERICA BANCORPORATION is currently very high, coming in at 92.60%. Regardless of WABC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WABC's net profit margin of 31.54% compares favorably to the industry average.
- WABC, with its decline in revenue, slightly underperformed the industry average of 3.4%. Since the same quarter one year prior, revenues fell by 13.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Commercial Banks industry and the overall market, WESTAMERICA BANCORPORATION's return on equity exceeds that of both the industry average and the S&P 500.
- In its most recent trading session, WABC has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Despite the decline in its share price over the last year, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry. We feel, however, that other strengths this company displays compensate for this.
- WESTAMERICA BANCORPORATION's earnings per share declined by 14.7% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, WESTAMERICA BANCORPORATION reported lower earnings of $2.93 versus $3.07 in the prior year. For the next year, the market is expecting a contraction of 12.6% in earnings ($2.56 versus $2.93).