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"We rate KEARNY FINANCIAL CORP (KRNY) a BUY. This is driven by some important positives, 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, increase in net income, solid stock price performance, expanding profit margins and notable return on equity. 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 greatly exceeded the industry average of 25.6%. Since the same quarter one year prior, revenues slightly increased by 8.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Thrifts & Mortgage Finance industry average. The net income increased by 13.0% when compared to the same quarter one year prior, going from $2.59 million to $2.92 million.
- KEARNY FINANCIAL CORP reported flat earnings per share in the most recent quarter. 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, 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).
- Compared to its closing price of one year ago, KRNY's share price has jumped by 39.04%, exceeding the performance of the broader market during that same time frame. 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.
- The gross profit margin for KEARNY FINANCIAL CORP is currently very high, coming in at 74.20%. Regardless of KRNY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 10.72% trails the industry average.
- You can view the full analysis from the report here: KRNY Ratings Report