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Consumer Loan Stocks' Earnings Queued Up: CSH. FCFS & More
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The earnings season is in full swing, with investors keeping a close tab on the companies’ performances in comparison with the market expectations.
Per our latest Earnings Preview article, overall earnings for the Finance sector in Apr–Jun quarter are expected to be down 0.4% year over year. Also, revenues are expected to decline 0.5%. Notably, during the previous quarter, the sector reflected a 6.9% decline in earnings while revenues improved 3.3%.
Industry wide weakness and global concerns affected the performance of the finance sector in the previous quarter. However, the quarter under review witnessed a better environment to some extent with positives including rebound in oil prices and continued recovery of the U.S. economy.
Further, underlying loan demand remained modest during the Apr–Jun quarter with overall growth in loans including commercial and industrial and commercial real estate loans. Also, demand for several consumer categories including card and auto remained strong.
Notably, amid a declining unemployment, improving housing sector and low default rates the performance of consumer finance business should not disappoint this earnings season. Further, global cues are not likely to have impact on the consumer finance companies as the operations are primarily within the domestic boundaries.
Before delving further, let’s have a look at how our model offers insights into the expected performance of the companies.
Per our quantitative model, in order to be confident of an earnings surprise, a stock needs to have the right combination of the two key criteria – a favorable Zacks Rank – Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) – and a positive Earnings ESP.
Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising with their upcoming earnings announcement. It shows the percentage of difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
We selected the following consumer loan firms, expected to release results on Jul 28:
Cash America International, Inc. : Estimates have been stable ahead of the release of the company’s second-quarter results. Notably, the Zacks Consensus Estimate of 15 cents for the company reflects a year-over-year increase of 36.36%.
Notably, the company has a Zacks Rank #3 with an Earnings ESP of 0.00%, making it difficult to conclusively predict an earnings beat this quarter. Though Zacks Rank #3 increases the predictive power of our model, we also need a positive Earnings ESP to be sure of an earnings beat.
Regarding earnings surprise history, the company recorded a positive earnings surprise in all the four trailing quarters, with an the average beat of 24.49%.
First Cash Financial Services Inc. (FCFS - Free Report) : The Zacks Consensus Estimate of 50 cents reflects a year-over-year decline of 19.89%. Also, it is not likely to beat expectations as the company has a Zacks Rank #3 with an Earnings ESP of 0.00%.
Notably, estimates have been stable lately ahead of the company’s second-quarter 2016 earnings release. The company reported positive earnings surprise in two of the trailing four quarters with an average positive surprise of 11.11%.
World Acceptance Corp. (WRLD - Free Report) : Estimates have been stable lately ahead of the release of the company’s fiscal-first quarter 2017 (ending Jun 30) results. The Zacks Consensus Estimate of $2.08 for the company reflects a year over year decline of 23.25%. Also, the company has a Zacks Rank #3 with an Earnings ESP of 0.00%, lowering the chances of an earnings beat.
Despite recording positive earnings surprise in two of the four trailing quarters, the average earnings surprise was a negative 2.70%.
Enova International, Inc. (ENVA - Free Report) : The Zacks Consensus Estimate of 20 cents for the company reflects a year-over-year decline of 50%. Notably, the estimates remained unchanged ahead of the company’s second-quarter 2016 results.
The company is not likely to beat expectations as it has a Zacks Rank #3 with an Earnings ESP of 0.00%.
Notably, the company reported negative earnings surprise in one of the trailing four quarters with an average negative surprise of 11.28%.
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Consumer Loan Stocks' Earnings Queued Up: CSH. FCFS & More
The earnings season is in full swing, with investors keeping a close tab on the companies’ performances in comparison with the market expectations.
Per our latest Earnings Preview article, overall earnings for the Finance sector in Apr–Jun quarter are expected to be down 0.4% year over year. Also, revenues are expected to decline 0.5%. Notably, during the previous quarter, the sector reflected a 6.9% decline in earnings while revenues improved 3.3%.
Industry wide weakness and global concerns affected the performance of the finance sector in the previous quarter. However, the quarter under review witnessed a better environment to some extent with positives including rebound in oil prices and continued recovery of the U.S. economy.
Further, underlying loan demand remained modest during the Apr–Jun quarter with overall growth in loans including commercial and industrial and commercial real estate loans. Also, demand for several consumer categories including card and auto remained strong.
Notably, amid a declining unemployment, improving housing sector and low default rates the performance of consumer finance business should not disappoint this earnings season. Further, global cues are not likely to have impact on the consumer finance companies as the operations are primarily within the domestic boundaries.
Before delving further, let’s have a look at how our model offers insights into the expected performance of the companies.
Per our quantitative model, in order to be confident of an earnings surprise, a stock needs to have the right combination of the two key criteria – a favorable Zacks Rank – Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) – and a positive Earnings ESP.
Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising with their upcoming earnings announcement. It shows the percentage of difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
We selected the following consumer loan firms, expected to release results on Jul 28:
Cash America International, Inc. : Estimates have been stable ahead of the release of the company’s second-quarter results. Notably, the Zacks Consensus Estimate of 15 cents for the company reflects a year-over-year increase of 36.36%.
Notably, the company has a Zacks Rank #3 with an Earnings ESP of 0.00%, making it difficult to conclusively predict an earnings beat this quarter. Though Zacks Rank #3 increases the predictive power of our model, we also need a positive Earnings ESP to be sure of an earnings beat.
Regarding earnings surprise history, the company recorded a positive earnings surprise in all the four trailing quarters, with an the average beat of 24.49%.
CASH AM INTL Price and EPS Surprise
CASH AM INTL Price and EPS Surprise | CASH AM INTL Quote
First Cash Financial Services Inc. (FCFS - Free Report) : The Zacks Consensus Estimate of 50 cents reflects a year-over-year decline of 19.89%. Also, it is not likely to beat expectations as the company has a Zacks Rank #3 with an Earnings ESP of 0.00%.
Notably, estimates have been stable lately ahead of the company’s second-quarter 2016 earnings release. The company reported positive earnings surprise in two of the trailing four quarters with an average positive surprise of 11.11%.
FIRST CASH FINL Price and EPS Surprise
FIRST CASH FINL Price and EPS Surprise | FIRST CASH FINL Quote
World Acceptance Corp. (WRLD - Free Report) : Estimates have been stable lately ahead of the release of the company’s fiscal-first quarter 2017 (ending Jun 30) results. The Zacks Consensus Estimate of $2.08 for the company reflects a year over year decline of 23.25%. Also, the company has a Zacks Rank #3 with an Earnings ESP of 0.00%, lowering the chances of an earnings beat.
Despite recording positive earnings surprise in two of the four trailing quarters, the average earnings surprise was a negative 2.70%.
WORLD ACCEPTANC Price and EPS Surprise
WORLD ACCEPTANC Price and EPS Surprise | WORLD ACCEPTANC Quote
Enova International, Inc. (ENVA - Free Report) : The Zacks Consensus Estimate of 20 cents for the company reflects a year-over-year decline of 50%. Notably, the estimates remained unchanged ahead of the company’s second-quarter 2016 results.
The company is not likely to beat expectations as it has a Zacks Rank #3 with an Earnings ESP of 0.00%.
Notably, the company reported negative earnings surprise in one of the trailing four quarters with an average negative surprise of 11.28%.
ENOVA INTL INC Price and EPS Surprise
ENOVA INTL INC Price and EPS Surprise | ENOVA INTL INC Quote
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>