World Acceptance's Q2 revenue rises 3.2%, swings to profit

Overview

• US personal lender's fiscal Q2 revenue rose 3.2% yr/yr

• Co swung to net profit, with diluted EPS at $1.92 compared to loss of $0.33 a year ago

• Company repurchased 3% of shares for $25 mln during quarter

Outlook

• Company expects to carefully increase new customer lending in coming quarters

Result Drivers

• EXISTING CUSTOMER BORROWING - Co said borrowing by existing customers increased, while borrowing by new customers declined

• UNDERWRITING TIGHTENING - Co tightened underwriting for new customers at end of prior fiscal year, leading to 5.4% decrease in customer base

• CREDIT LOSS PROVISION - Provision for credit losses decreased $3.8 mln to $46.0 mln, supporting net income improvement

Company press release:

Key Details

Analyst Coverage

• The one available analyst rating on the shares is "hold"

• 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 $180.00, about 6.1% above its October 22 closing price of $169.66

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 19 three months ago

Reuters Recommended Reads

• Oct 22 - Enova Q3 adjusted EPS beats estimates on healthy loan demand, stable credit

• Oct 22 - Consumer Portfolio Services Q3 net income rises on higher loan origination volume

• Oct 21 - Pressure on lower-income US households raises delinquency risks, Morningstar DBRS says

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)