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NEW YORK (TheStreet) -- Medallion Financial (TAXI) has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate MEDALLION FINANCIAL CORP (TAXI) 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 robust revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, disappointing return on equity and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 1.0%. Since the same quarter one year prior, revenues rose by 19.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 421.26% to $18.90 million when compared to the same quarter last year. In addition, MEDALLION FINANCIAL CORP has also vastly surpassed the industry average cash flow growth rate of -147.41%.
- The gross profit margin for MEDALLION FINANCIAL CORP is rather high; currently it is at 65.05%. Regardless of TAXI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TAXI's net profit margin of 58.13% significantly outperformed against the industry.
- MEDALLION FINANCIAL CORP's earnings per share declined by 6.9% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, MEDALLION FINANCIAL CORP reported lower earnings of $1.16 versus $1.21 in the prior year. For the next year, the market is expecting a contraction of 1.7% in earnings ($1.14 versus $1.16).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. 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.
- You can view the full analysis from the report here: TAXI Ratings Report