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) -- Zions (Nasdaq: ZION) 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 solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- The gross profit margin for ZIONS BANCORPORATION is currently very high, coming in at 94.02%. 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 -9.03% is in-line with the industry average.
- ZIONS BANCORPORATION has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, ZIONS BANCORPORATION increased its bottom line by earning $1.58 versus $0.97 in the prior year. This year, the market expects an improvement in earnings ($1.80 versus $1.58).
- ZION, with its decline in revenue, slightly underperformed the industry average of 11.8%. Since the same quarter one year prior, revenues fell by 16.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- Net operating cash flow has decreased to $82.73 million or 49.32% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.