CURO Group Holdings Corp. (CURO - Free Report) appears to be a promising bet now given its solid organic growth and robust fundamentals. Also, its earnings growth prospects are impressive. In addition, relatively higher interest rates and decent lending scenario are anticipated to support top-line growth.
Further, it has been successful in gaining analysts’ confidence. Its current-year earnings estimates have been revised 6.4% upward over the past 60 days. As a result, the stock carries a Zacks Rank #2 (Buy).
Shares of CURO Group have gained 40.9% so far this year compared with the industry’s growth of 30.2%.
What Makes the Stock Attractive
Revenue Strength: The company has been witnessing consistent improvement in revenues. Over the past three years (ended 2018), total revenues recorded a compound annual growth rate (CAGR) of 14.9%.
The upward trend is expected to continue in 2019 at a growth rate of 6.1%, with support from decent lending scenario and CURO Group’s efforts to grow loans.
Steady Capital Deployment Activities: The company remains committed to enhancing shareholders’ value. In April 2019, the board authorized a new share buyback program of up to $50 million, to be made from time-to-time in the open market and/or in privately negotiated transactions.
Earnings per Share Growth: CURO Group’s earnings for 2019 are projected to increase 43.6% compared with the industry’s average of 13.4%. This earnings momentum is likely to continue in the near term as reflected by the company’s projected earnings growth rate of 10.8% for 2020.
Superior Return on Equity (ROE): CURO Group’s ROE of 429.2% compared with the industry average of 15.2% underlines the company’s commendable position over its peers.
Valuation Looks Reasonable: CURO Group looks undervalued with respect to its price-to-cash flow (P/CF) and price-to-earnings (P/E) ratios. The company has a P/CF ratio of 4.94 compared with the industry average of 6.03. Also, the bank’s P/E ratio of 5.15 is below the industry average of 7.72. Additionally, the company has a Value Score of A.
Favorable VGM Score: CURO Group has a VGM Score of A. Our research shows stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
Other Stocks to Consider
The Zacks Consensus Estimate for Ally Financial’s (ALLY - Free Report) current-year earnings has been revised slightly upward in the past 60 days. Also, its share price has surged 47.8% so far this year. It carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Encore Capital Group Inc (ECPG - Free Report) currently has a Zacks Rank of 2. Its earnings estimates for 2019 have been revised 3.9% upward over the past 60 days. Further, year to date, the company’s shares have gained 44.3%.
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