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4 Reasons That Make Enova International (ENVA) a Key Pick

Zacks Equity Research

It seems to be a wise idea to add Enova International Inc. ENVA stock to your portfolio now, given its strong fundamentals and promising prospects. Solid loan and finance receivable balances will likely continue enhancing the company’s profitability.

The stock has been witnessing upward estimate revisions, reflecting analysts’ optimism about its earnings growth potential. Over the past 30 days, the Zacks Consensus Estimate for 2019 and 2020 moved 10.3% and 15.3% north, respectively.

The Zacks Rank #1 (Strong Buy) stock has rallied 12.5% so far this year, underperforming the industry’s growth of 30.5%.


Factors Favoring Enova International

Revenue growth: Revenue growth remains a key strength for Enova International. The top line witnessed a five-year CAGR of 8.3% (2014-2018), driven by solid loan and finance receivable balances. Also, its projected sales growth rate of 12.2% for 2019 and 8.8% for 2020 indicate continuation of the momentum.

Earnings strength: Over the past three to five years, earnings of Enova International have witnessed nearly 5% growth. The uptrend is anticipated to continue as the company’s earnings are projected to be up 53.9% and 8.3% for 2019 and 2020, respectively.

Also, Enova International has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.3%.

The company has a Growth Score of A. Our research shows that stocks with the combination of a Style Score of A or B and a Zacks Rank #1 or 2 (Buy) offer the best upside potential.

Superior Return on Equity (ROE): Enova International’s ROE of 26.93% compares favorably with the industry average of 13.65%. This highlights the company’s commendable position over its peers in using shareholders’ funds.

Stock seems undervalued: The company looks undervalued, with respect to its price/earnings (P/E) (F1) and price/sales (P/S) ratios. It has a P/E (F1) ratio of 5.53, which is below the industry average of 6.84. Also, its P/S ratio of 0.61 is lower than the industry average of 1.37.

Additionally, the stock has a Value Score of A. The Value Score condenses all valuation metrics into one actionable score that helps investors steer clear of “value traps” and identify stocks that are truly trading at a discount.

Other Key Picks

Navient Corporation NAVI has witnessed 2.9% upward earnings estimate revisions for 2019, in the past 30 days. Moreover, the Zacks Rank #1 stock has jumped 62.2% in the year-to-date period. You can see the complete list of today’s Zacks #1 Rank stocks here.

CURO Group Holdings Corp.’s CURO ongoing-year earnings estimate moved 4.5% north in 30 days. Additionally, the stock has gained 43.6% so far this year. It currently carries a Zacks Rank #2.

Encore Capital Group, Inc ECPG has witnessed upward earnings estimate revision of 4.1% for 2019 in the past 30 days. Moreover, the Zacks #2 Ranked stock has risen 51.3% year to date.

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Enova International, Inc. (ENVA) : Free Stock Analysis Report
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