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"We rate KEARNY FINANCIAL CORP (KRNY) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including premium valuation and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 23.7%. 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 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.
- Compared to its closing price of one year ago, KRNY's share price has jumped by 30.23%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- Net operating cash flow has declined marginally to $5.53 million or 5.95% when compared to the same quarter last year. Despite a decrease in cash flow of 5.95%, KEARNY FINANCIAL CORP is in line with the industry average cash flow growth rate of -9.65%.
- You can view the full analysis from the report here: KRNY Ratings Report
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