EZCORP, Inc. (EZPW) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Ezcorp (EZPW)? Shares have been on the move with the stock up 17.3% over the past month. The stock hit a new 52-week high of $10.24 in the previous session. Ezcorp has gained 15.1% since the start of the year compared to the 0.9% move for the Zacks Finance sector and the 1.2% return for the Zacks Financial - Consumer Loans industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on January 31, 2024, Ezcorp reported EPS of $0.36 versus consensus estimate of $0.29.
For the current fiscal year, Ezcorp is expected to post earnings of $1.05 per share on $1.17 billion in revenues. This represents a 14.13% change in EPS on a 11.22% change in revenues. For the next fiscal year, the company is expected to earn $1.11 per share on $1.26 billion in revenues. This represents a year-over-year change of 5.71% and 7.9%, respectively.
Valuation Metrics
Ezcorp may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Ezcorp has a Value Score of A. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 9.6X current fiscal year EPS estimates, which is a premium to the peer industry average of 9.5X. On a trailing cash flow basis, the stock currently trades at 5.3X versus its peer group's average of 6.4X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Ezcorp currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Ezcorp passes the test. Thus, it seems as though Ezcorp shares could have a bit more room to run in the near term.
How Does EZPW Stack Up to the Competition?
Shares of EZPW have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is World Acceptance Corporation (WRLD). WRLD has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. World Acceptance Corporation beat our consensus estimate by 75.31%, and for the current fiscal year, WRLD is expected to post earnings of $13.28 per share on revenue of $563 million.
Shares of World Acceptance Corporation have gained 3.7% over the past month, and currently trade at a forward P/E of 11.69X and a P/CF of 20.32X.
The Financial - Consumer Loans industry may rank in the bottom 61% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for EZPW and WRLD, even beyond their own solid fundamental situation.
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EZCORP, Inc. (EZPW) : Free Stock Analysis Report
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