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Medallion Financial Corp Stock Upgraded (TAXI)

NEW YORK (TheStreet) -- Medallion Financial (Nasdaq:TAXI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, expanding profit margins, notable return on equity and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.

Highlights from the ratings report include:

  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 34.0% when compared to the same quarter one year prior, rising from $4.42 million to $5.92 million.
  • The gross profit margin for MEDALLION FINANCIAL CORP is rather high; currently it is at 55.90%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 70.40% significantly outperformed against the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, MEDALLION FINANCIAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Despite the weak revenue results, TAXI has outperformed against the industry average of 24.6%. Since the same quarter one year prior, revenues slightly dropped by 3.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

Medallion Financial Corp., through its subsidiaries, operates as a specialty finance company in the United States. The company engages in originating, acquiring, and servicing loans that finance taxicab medallions and various types of commercial businesses. The company has a P/E ratio of 20.1, above the average financial services industry P/E ratio of 9.7 and above the S&P 500 P/E ratio of 17.7. Medallion Financial has a market cap of $237.7 million and is part of the financial sector and financial services industry. Shares are down 2.6% year to date as of the close of trading on Thursday.

You can view the full Medallion Financial Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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