Back to top

Analyst Blog

Zacks Investment Research downgraded DFC Global Corp. to a Zacks Rank #5 (Strong Sell) on Aug 27.

Why the Downgrade?

DFC Global has witnessed sharp downward estimate revisions after reporting disappointing fiscal fourth quarter and 2013 results.

On Aug 22, DFC Global reported fiscal fourth quarter and 2013 earnings results. Fiscal fourth quarter earnings per share lagged the year-ago earnings of 58 cents per share by 15.5%, though it surpassed the Zacks Consensus Estimate by 4.3%.

Though the total revenue of DFC Global for the quarter inched up 0.9% year over year, it fell short of the Zacks Consensus estimate by 21%.

Fiscal 2013 bottom line fell short of the year ago earnings by 18.5%.

Operating expenses in the reported quarter escalated 20.2% year over year.

The extent of increase in operating expenses offset the increase in revenue, thereby pulling down operating income by 31.9% year over year to $67.3 million in the reported quarter. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were $69.3 million, down 11.7% year over year.

While DFC Global exited fiscal 2013 with cash and cash equivalents of 196.2 million, down 12.4% year over year, long-term debt increased 3.8% year over year to $975 million as of Jun 30, 2013.

DFC Global expects to incur expense in the range of $10.0 million–$15.0 million to support ongoing regulatory related activities, including regulatory advisory costs, legal opinion and analysis, and audit and regulatory compliance costs in fiscal 2014.

The Zacks Consensus Estimate for fiscal 2014 slumped 86% to $1.12 per share over the last 7 days and all 4 estimates moved south. For fiscal 2015, 1 of 4 estimates was revised downward over the same time frame, sinking the Zacks Consensus Estimate by 36% to $1.66 per share.

Other Stocks to Consider

Not all stocks in the sector are performing as poorly as DFC Global. Miscellaneous financial service providers FleetCor Technologies, Inc. (FLT - Snapshot Report) with Zacks Rank #1 (Strong Buy) and Financial Engines, Inc. (FNGN - Snapshot Report) and SS&C Technologies Holdings, Inc. (SSNC - Snapshot Report) with Zacks Rank #2 (Buy) are worth considering.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SYNAPTICS I… SYNA 78.11 +8.14%
GREEN PLAIN… GPRE 39.41 +5.12%
PILGRIM'S P… PPC 28.82 +3.08%
SKYWORKS SO… SWKS 52.07 +2.58%
CLAYTON WIL… CWEI 109.08 +2.51%