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Can Loan Growth Aid Enova International (ENVA) Q4 Earnings?

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Enova International (ENVA - Free Report) is scheduled to report fourth quarter and 2018 results on Jan 31, after market close. The company is expected to witness year-over-year growth in revenues and earnings.

In the last reported quarter, the Chicago, IL-based online financial services provider displayed organic growth. Continued rise in revenues and loan growth were the key highlights. However, the results were partially offset by higher expenses.

Notably, Enova boasts an impressive surprise history. It surpassed earnings estimates in three of the trailing four quarters, the average beat being 19.7%.

Enova International, Inc. Price and EPS Surprise


However, the company’s activities in the fourth quarter were not able to impress the analysts. As a result, the Zacks Consensus Estimate for earnings of 50 cents has remained stable over the past 30 days. Nonetheless, the figure represents year-over-year growth of 92.3%.

Moreover, the consensus estimate for revenues of $303.6 million reflects a rise of 24.6% from the prior-year quarter.

Before we take a look at what our quantitative model predicts, let’s check the factors that are expected to impact fourth-quarter results.

Factors at Play

Growth in Loans: The company’s efforts to grow loan portfolio by increasing awareness of its products are likely to have attracted new customers and thus result in higher loans originations in this quarter.

Foreign Exchange Fluctuations Might Impact Revenues: The company remains exposed to foreign exchange risks as it has businesses in the United Kingdom and Brazil. Thus, weakness in the British pound sterling during the fourth quarter on account of Brexit might result in lower international revenues of which 85.2% is generated from the United Kingdom.

Overall Revenues to Rise: Given the rise in loan and rising interest rates, overall revenues are likely to have increased during the quarter. Notably, management expects total revenues in the range of $290-$310 million for the fourth quarter compared with $243 million earned in year-ago quarter.

Expenses to Remain High: Enova’s expenses are likely to have escalated during the quarter due to its efforts to attract new customers and marketing of new and existing products.

Earnings Whispers

According to our quantitative model, we cannot conclusively predict an earnings beat for Enova in the upcoming results. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #3 (Hold) or better for this to happen, which is not the case here as elaborated below.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Enova has an Earnings ESP of 0.00%.

Zacks Rank: The stock currently carries a Zacks Rank #3.

Stocks That Warrant a Look

Here are some stocks worth considering, as they have the right combination of elements to post an earnings beat this quarter.

BOK Financial Corporation (BOKF - Free Report) is slated to report results on Jan 30. It has an Earnings ESP of +1.08% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Credit Acceptance Corporation (CACC - Free Report) is also slated to release results on Jan 30. It has an Earnings ESP of +0.21% and carries a Zacks Rank #3.

Ares Capital Corporation (ARCC - Free Report) has an Earnings ESP of +1.10% and carries a Zacks Rank of 3. The company is slated to release results on Feb 12.

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