NEW YORK ( TheStreet) -- FirstCity Financial Corporation (Nasdaq: FCFC) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including generally poor debt management, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • Although FCFC's debt-to-equity ratio of 3.50 is very high, it is currently less than that of the industry average.
  • The gross profit margin for FIRSTCITY FINANCIAL CORP is rather low; currently it is at 16.40%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 8.50% significantly trails the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • FCFC's very impressive revenue growth greatly exceeded the industry average of 9.4%. Since the same quarter one year prior, revenues leaped by 61.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

FirstCity Financial Corporation operates as a financial services company. The company operates in two segments, Portfolio Asset Acquisition and Resolution, and Special Situations Platform. The company has a P/E ratio of 3.7, equal to the average financial services industry P/E ratio and below the S&P 500 P/E ratio of 21.5. FirstCity Financial has a market cap of $71.4 million and is part of the financial sector and financial services industry. The stock last closed at $7 and the average volume of shares traded for FirstCity Financial has been 7,800 shares per day over the past 30 days. Shares are down 13.9% year to date as of the close of trading on Thursday.

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