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NEW YORK (TheStreet) -- Westamerica Bancorp (WABC) has been upgraded by TheStreet Ratings from Hold to Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate WESTAMERICA BANCORPORATION (WABC) a BUY. This is driven by a number of strengths, 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 expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 31.18% significantly outperformed against the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 12.9%. Since the same quarter one year prior, revenues slightly dropped by 9.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, WESTAMERICA BANCORPORATION has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Net operating cash flow has significantly decreased to $11.79 million or 55.30% when compared to the same quarter last year. Despite a decrease in cash flow WESTAMERICA BANCORPORATION is still fairing well by exceeding its industry average cash flow growth rate of -97.30%.
- You can view the full analysis from the report here: WABC Ratings Report
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