Medallion Financial Corp. Common Stock (MFIN)

FairStock Score: 88/100 — HIGH CONVICTION

Key Financials

Strengths

• Generates $10 million in annual free cash flow (4.5% yield on market cap)
• Solid return on equity of 11.7% above cost of capital
• Revenue growth of 25.4% demonstrates strong top-line momentum
• Attractive 5.0% dividend yield providing steady income returns
• FairStock composite score of 88/100 places it in the top tier across value, quality, and momentum factors

Concerns

• High leverage at 4.73x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of 0.2 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Medallion Financial Corp. Common Stock is a micro-cap financial services company valued at $226 million. The business generates $353 million in annual revenue with a 3.5% net margin and $10 million in free cash flow. From a quality standpoint, Medallion shows distressed Altman Z-Score of 0.2 warrants caution and adequate 12% ROE. On valuation, the stock is deeply undervalued on a P/E basis at 5.3x, with offers a 64% margin of safety vs Graham Number of $27. Growth dynamics show revenue growing at 25.4% and profit growth of 20.3%. The 5.0% dividend yield adds an income component for patient holders. Our composite FairStock Score of 88/100 reflects strong fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Medallion's 25% revenue growth trajectory could accelerate as it captures additional market share in the financial services sector. With $10 million in annual free cash flow (4.5% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 4.7x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer