MoneyGram International Inc. Stock Upgraded (MGI)

Editor's Note: 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.

NEW YORK ( TheStreet) -- MoneyGram International (NYSE: MGI) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and increase in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.9%. Since the same quarter one year prior, revenues rose by 10.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MONEYGRAM INTERNATIONAL INC 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, MONEYGRAM INTERNATIONAL INC continued to lose money by earning -$0.70 versus -$12.52 in the prior year. This year, the market expects an improvement in earnings ($1.20 versus -$0.70).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 546.8% when compared to the same quarter one year prior, rising from $3.12 million to $20.20 million.
  • The gross profit margin for MONEYGRAM INTERNATIONAL INC is rather high; currently it is at 61.00%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MGI's net profit margin of 5.69% significantly trails the industry average.
  • MGI has underperformed the S&P 500 Index, declining 18.20% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
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MoneyGram International, Inc., through its subsidiaries, provides payment services worldwide. The company operates in two segments, Global Funds Transfer and Financial Paper Products. The company has a P/E ratio of 17.2, below the S&P 500 P/E ratio of 17.7. MoneyGram International has a market cap of $816.9 million and is part of the services sector and diversified services industry. Shares are up 6.2% year to date as of the close of trading on Thursday.

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

-- Written by a member of TheStreet Ratings Staff

Editor's Note: 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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