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) -- United Security (Nasdaq: USBI) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins and notable return on equity. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.
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- The gross profit margin for UNITED SEC BANCSHARES INC is currently very high, coming in at 90.15%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.45% trails the industry average.
- UNITED SEC BANCSHARES INC's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, UNITED SEC BANCSHARES INC turned its bottom line around by earning $0.37 versus -$1.51 in the prior year.
- Compared to its closing price of one year ago, USBI's share price has jumped by 53.88%, exceeding the performance of the broader market during that same time frame. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Commercial Banks industry. The net income has decreased by 23.3% when compared to the same quarter one year ago, dropping from $1.18 million to $0.90 million.