Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Umpqua Holdings Corporation (Nasdaq: UMPQ) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, expanding profit margins, reasonable valuation levels, notable return on equity and increase in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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- UMPQUA HOLDINGS CORP has improved earnings per share by 9.5% 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. During the past fiscal year, UMPQUA HOLDINGS CORP increased its bottom line by earning $0.91 versus $0.65 in the prior year. This year, the market expects an improvement in earnings ($0.94 versus $0.91).
- The gross profit margin for UMPQUA HOLDINGS CORP is currently very high, coming in at 92.75%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, UMPQ's net profit margin of 18.95% significantly trails the industry average.
- UMPQ, with its decline in revenue, slightly underperformed the industry average of 0.9%. Since the same quarter one year prior, revenues slightly dropped by 2.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- 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, UMPQUA HOLDINGS CORP's return on equity is below that of both the industry average and the S&P 500.