Consumer lending firm World Acceptance's Q1 revenue beats estimates

Overview

• World Acceptance fiscal Q1 revenue rises 2.3%, beating analyst expectations

• Net income for fiscal Q1 declines sharply, impacted by credit loss provisions

• Co announces $100 mln share repurchase program and redemption of senior notes

Outlook

• Company expects higher revenue and lower charge-offs in coming quarters

• World Acceptance anticipates improved portfolio yield with tighter underwriting

• Company sees continued improvement in gross and net yield

• World Acceptance expects solid returns on fiscal 2025 originations

Result Drivers

• LOAN GROWTH - Outstanding loans increased by $38.7 mln

• DELINQUENCY REDUCTION - Total delinquency decreased by $15.9 mln, with loans 61 days or more past due decreasing, indicating improved credit quality

• CUSTOMER BASE EXPANSION - Customer base grew by 4.0%, contributing to increased loan origination volumes

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the consumer lending peer group is "buy."

• Wall Street's median 12-month price target for World Acceptance Corp is $138.00, about 24.1% below its July 23 closing price of $171.30

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 9 three months ago

Press Release: ID:nBwb69RcXa