Share price has had a good run lately, and recent buyers, perhaps short-term traders, were hoping for an earnings beat. Some of competition (FCFS and CSH) posted earnings beats and their share price popped higher today. EZPW only meeting guidance is seen as a disappointment for some short-term traders who rushed to sell in after hours. The growth in this sector is strong, and it won't be long before EZPW share price recovers and makes new highs.
I don't think the bad debt would matter to anyone if they had reported earnings 2 cents higher.
This appears to be as much an accounting problem as a business one. They write off the whole balance of an installment loan upon a single late or missed payment. I'm not much of an accountant, but I can think of a couple pretty conservative ways to avoid having to let that drop to the bottom line immediately.
If the bad debt was coming from established lines (absent a promotional campaign that could account for it) the big boys would be more likely to be reacting to it.
And really, with the present state of US banks, developing the installment loan product is well worth some initial pain.
However it was done, under Mr Rotunda's leadership the company managed analyst expectations effectively. It appears that the present team is not doing that as well. After a spectacularly good report, we see headlines about missing consensus expectations.
Of course, it is not in anybody's job objectives to take care of the non-voting owners. There ARE pressures to do so, and one hopes that the new regime will learn.
And yes, I was impressed with EZCorp's resilience against political meddling. Also, the installment loan product is being refined (at less expense than I would have anticipated) into an almost unlimited growth vehicle. The banks are in full "If you need a loan you can't qualify--not at any price" mode. We may as well take the business they have abandoned.