Paragon Finance Receives 'Hold' Rating After Record Breaking Quarter Results

Paragon Finance, a microcap finance company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in the quarter ending June 2024, with a PAT (Q) of Rs 1.01 crore and EPS (Q) of Rs 2.38, both being the highest in the company's history.
The stock is currently in a Mildly Bullish range and its technical factors, such as MACD and KST, are also Bullish. With a ROE of 4, the stock is considered to have an attractive valuation with a price to book value of 0.9. In addition, the stock is currently trading at a discount compared to its average historical valuations.

Over the past year, Paragon Finance has generated a return of 79.60%, outperforming the BSE 500 index. However, its profits have only risen by 16.5%, resulting in a PEG ratio of 1.2. The majority shareholders of the company are its promoters.

Despite consistent returns over the last 3 years, with the stock outperforming the BSE 500 index in each of the last 3 annual periods, Paragon Finance has weak long-term fundamental strength. Its average ROE is only 5.20% and its net sales have seen a negative annual growth rate of -2.51%, with operating profit at -148.18%.

Overall, while Paragon Finance has shown strong performance in the recent quarter, its long-term growth and fundamental strength may be a cause for concern. Investors are advised to hold onto their positions for now and monitor the company's performance closely.