NEW YORK ( TheStreet) -- Medallion Financial Corporation (Nasdaq: TAXI) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we find that the company has not been very careful in the management of its balance sheet. Highlights from the ratings report include:
- Although TAXI's debt-to-equity ratio of 2.34 is very high, it is currently less than that of the industry average.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Capital Markets industry and the overall market, MEDALLION FINANCIAL CORP's return on equity is below that of both the industry average and the S&P 500.
- TAXI, with its decline in revenue, slightly underperformed the industry average of 9.1%. Since the same quarter one year prior, revenues fell by 13.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- 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 181.1% when compared to the same quarter one year prior, rising from -$5.76 million to $4.67 million.
- MEDALLION FINANCIAL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, MEDALLION FINANCIAL CORP increased its bottom line by earning $0.64 versus $0.05 in the prior year. This year, the market expects an improvement in earnings ($1.01 versus $0.64).