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"We rate MEDLEY CAPITAL CORP (MCC) 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 1.0%. Since the same quarter one year prior, revenues rose by 39.2%. 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.
- The gross profit margin for MEDLEY CAPITAL CORP is rather high; currently it is at 68.02%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.09% is above that of the industry average.
- MEDLEY CAPITAL CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, MEDLEY CAPITAL CORP reported lower earnings of $1.13 versus $1.32 in the prior year. This year, the market expects an improvement in earnings ($1.48 versus $1.13).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has significantly decreased by 41.6% when compared to the same quarter one year ago, falling from $15.13 million to $8.83 million.
- 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, MEDLEY CAPITAL 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: MCC Ratings Report