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"We rate KEARNY FINANCIAL CORP (KRNY) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, solid stock price performance and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 12.7%. Since the same quarter one year prior, revenues rose by 12.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- KEARNY FINANCIAL CORP has improved earnings per share by 33.3% 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, KEARNY FINANCIAL CORP increased its bottom line by earning $0.16 versus $0.11 in the prior year. This year, the market expects an improvement in earnings ($0.20 versus $0.16).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Thrifts & Mortgage Finance industry. The net income increased by 47.0% when compared to the same quarter one year prior, rising from $1.93 million to $2.83 million.
- Powered by its strong earnings growth of 33.33% and other important driving factors, this stock has surged by 64.50% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- Net operating cash flow has significantly increased by 66.16% to $11.20 million when compared to the same quarter last year. Despite an increase in cash flow of 66.16%, KEARNY FINANCIAL CORP is still growing at a significantly lower rate than the industry average of 121.36%.
- You can view the full analysis from the report here: KRNY Ratings Report
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