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) -- Kearny Financial Corporation (Nasdaq: KRNY) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins, impressive record of earnings per share growth and notable return on equity. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
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- The gross profit margin for KEARNY FINANCIAL CORP is currently very high, coming in at 74.88%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, KRNY's net profit margin of 8.21% significantly trails the industry average.
- KEARNY FINANCIAL CORP 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, KEARNY FINANCIAL CORP increased its bottom line by earning $0.11 versus $0.08 in the prior year. For the next year, the market is expecting a contraction of 36.4% in earnings ($0.07 versus $0.11).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Thrifts & Mortgage Finance industry average, but is greater than that of the S&P 500. The net income increased by 60.7% when compared to the same quarter one year prior, rising from $1.20 million to $1.93 million.
- In its most recent trading session, KRNY 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. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.