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) -- Westamerica Bancorp (Nasdaq: WABC) 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 and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, premium valuation and deteriorating net income.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
- The gross profit margin for WESTAMERICA BANCORPORATION is currently very high, coming in at 96.09%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 31.52% significantly outperformed against the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 11.5%. Since the same quarter one year prior, revenues fell by 11.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- WESTAMERICA BANCORPORATION's earnings per share declined by 9.4% 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 $2.51 versus $2.93 in the prior year. For the next year, the market is expecting a contraction of 5.2% in earnings ($2.38 versus $2.51).