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Regional Managment (RM)
:RM
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Regional Management
(NYSE:RM)75Outperform
Positive Factors
Loan Growth
The company introduced its initial 2025 guidance, which points towards quicker loan growth for the year as credit continues to improve.
Stock Buyback
Board of Directors has authorized a stock repurchase program allowing for the repurchase of up to $30 million effective immediately.
Negative Factors
Earnings
Increased provisioning brings the 2025 EPS forecast down, and similar estimate reductions by the Street have led to the shares trading down.
Regional Management (RM) vs. S&P 500 (SPY)
Market Cap
$310.77M
Dividend Yield3.8%
Average Volume (3M)46.52K
Price to Earnings (P/E)7.6
Beta (1Y)1.18
Revenue Growth6.73%
EPS Growth151.08%
CountryUS
Employees2,081
SectorFinancial
Sector Strength93
IndustryCredit Finance
Share Statistics
EPS (TTM)4.15
Shares Outstanding9,831,461
10 Day Avg. Volume40,497
30 Day Avg. Volume46,522
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)N/A
Price to Sales (P/S)1.03
Price to Cash Flow (P/CF)1.20
P/FCF Ratio1.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$38.00Price Target Upside20.22% Upside
Rating ConsensusHold
Number of Analyst Covering3
Regional Management Business Overview & Revenue Model
Company DescriptionRegional Management Corp. is a diversified consumer finance company that specializes in providing personalized loan solutions primarily to customers with limited access to traditional credit. Operating across various states in the United States, the company offers a range of financial products, including small loans, large loans, automobile loans, and retail installment loans, tailored to meet the borrowing needs of its clients.
How the Company Makes MoneyRegional Management Corp. generates revenue primarily through the interest income and fees associated with the personal loans it extends to consumers. The company's revenue streams include interest income from personal loans, origination fees, late fees, and other ancillary charges. By underwriting and servicing these loans, Regional Management Corp. earns a steady stream of interest payments over the life of the loan. Additionally, the company may engage in strategic partnerships with retailers or other financial institutions to expand its loan offerings and enhance its market reach, further contributing to its revenue.
Regional Management Financial Statement Overview
Summary
Regional Management shows strong revenue growth and operational efficiency with a healthy gross profit margin of 95.61%. The absence of debt enhances balance sheet stability, and cash flow generation is robust. However, there's room for improved profitability and equity utilization.Income Statement
Regional Management has demonstrated strong revenue growth, with a notable increase in total revenue from $551 million in 2023 to $588 million in 2024. The gross profit margin is healthy, indicating efficient cost management with a margin of 95.61% in 2024. However, the net profit margin remains relatively modest at 6.91%, suggesting the potential for improved profitability. EBIT and EBITDA margins have improved significantly to 50.28% in 2024, showing strong operational efficiency.75
Positive
Balance Sheet
The company exhibits a strong equity position with a stockholders' equity of $357 million in 2024, up from $322 million in 2023. The debt-to-equity ratio is favorable due to zero total debt, reflecting a low-risk profile. The equity ratio has improved to 18.71%, indicating a solid foundation. However, the return on equity (ROE) at 11.40% suggests there could be room for more efficient utilization of equity capital.70
Positive
Cash Flow
Operating cash flow has increased to $269 million in 2024, supporting the company's operational strength. The free cash flow to net income ratio is robust, with free cash flow growing to $264 million. The operating cash flow to net income ratio is notably high at 6.61, indicating strong cash generation relative to net income. This reflects a solid cash management strategy, although consistent investment in capital expenditures should be monitored.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 588.50M | 551.40M | 472.96M | 397.00M | 336.05M | Gross Profit |
| 562.68M | 331.37M | 307.91M | 385.35M | 328.85M | EBIT |
| 295.98M | 71.07M | 99.54M | 112.47M | 35.93M | EBITDA |
| 142.68M | 102.88M | 112.23M | 156.88M | 0.00 | Net Income Common Stockholders |
| 40.70M | 15.96M | 51.22M | 88.69M | 26.73M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.95M | 4.51M | 24.29M | 10.51M | 8.05M | Total Assets |
| 1.91B | 1.79B | 1.72B | 1.46B | 1.10B | Total Debt |
| 1.51B | 1.43B | 1.55B | 1.13B | 791.45M | Net Debt |
| 1.51B | 1.43B | 1.54B | 1.12B | 783.40M | Total Liabilities |
| 1.55B | 1.47B | 1.42B | 1.18B | 831.73M | Stockholders Equity |
| 357.08M | 322.27M | 308.63M | 282.74M | 272.12M |
| Cash Flow | Free Cash Flow | |||
| 263.87M | 237.10M | 212.92M | 182.15M | 166.78M | Operating Cash Flow |
| 268.93M | 249.17M | 224.33M | 189.01M | 172.58M | Investing Cash Flow |
| -315.37M | -278.72M | -447.29M | -355.06M | -98.81M | Financing Cash Flow |
| 53.41M | 26.43M | 205.57M | 243.36M | -58.32M |
Regional Management Technical Analysis
Negative
31.61
Price Trends
34.25
Negative
32.48
Negative
30.89
Positive
Market Momentum
-0.86
Positive
36.16
Neutral
32.08
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RM, the sentiment is Negative. The current price of 31.61 is below the 20-day moving average (MA) of 33.95, below the 50-day MA of 34.25, and above the 200-day MA of 30.89, indicating a neutral trend. The MACD of -0.86 indicates Positive momentum. The RSI at 36.16 is Neutral, neither overbought nor oversold. The STOCH value of 32.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RM.
Regional Management Risk Analysis
Regional Management disclosed 54 risk factors in its most recent earnings report. Regional Management reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Regional Management Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $718.33M | 8.92 | 19.28% | ― | -2.78% | 24.39% | |
77 Outperform | $5.16B | 20.13 | 12.78% | 1.29% | 7.51% | 19.24% | |
75 Outperform | $310.77M | 7.63 | 12.14% | 3.80% | 6.73% | 151.08% | |
74 Outperform | $2.41B | 12.30 | 17.19% | ― | 25.51% | 36.96% | |
73 Outperform | $835.42M | 46.00 | 5.93% | ― | 4.80% | -30.38% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
57 Neutral | $795.33M | 11.14 | 6.13% | ― | 39.47% | ― |
* Financial Sector Average
Performance Comparison
RM
Regional Management
31.68
8.46
36.43%
FCFS
FirstCash
115.42
0.39
0.34%
PRAA
Pra Group
19.89
-5.25
-20.88%
WRLD
World Acceptance
126.07
-3.66
-2.82%
ENVA
Enova International
91.51
29.76
48.19%
OPFI
OppFi
9.65
7.20
293.88%
Regional Management Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -13.70% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook for Regional Management, with strong financial performance, record portfolio growth, and improved credit metrics outweighing the challenges of increased delinquency rates and higher provisions for credit losses. Strategic plans for growth in 2025 indicate confidence in the company's market position and future performance.Highlights
Record Portfolio Growth
The company grew its portfolio by $73 million sequentially in Q4 2024, reaching nearly $1.9 billion, an all-time high. The portfolio generated record quarterly revenue of $155 million, up 9.3% from Q4 2023.
Improved Financial Performance
Net income was $9.9 million with diluted earnings per share of $0.98, a significant improvement from the prior year's net loss of $7.6 million.
Strong Revenue Yield and Expense Management
Total revenue yield was 33.4%, up 110 basis points from the prior year. G&A expenses were flat compared to Q4 2023, with an operating expense ratio improvement of 80 basis points.
Positive Credit Performance
The net credit loss rate improved by 430 basis points from the prior year, with the front book performing at lower loss levels than the back book.
Strategic Growth Plans for 2025
The company plans to accelerate portfolio growth by a minimum of 10% in 2025, leveraging improved credit performance and favorable macroeconomic conditions.
Lowlights
Increased Delinquency Rate
The 30-plus-day delinquency rate increased to 7.7%, up 80 basis points from the end of 2023.
Higher Provision for Credit Losses
The fourth quarter required a $7.7 million provision for credit losses, creating an after-tax drag of $6 million on net income.
Interest Expense and Funding Costs
Interest expense for the fourth quarter was $19.8 million, with expectations of higher costs due to new fixed rate securitizations replacing lower-rate maturing ones.
Company Guidance
During the Regional Management Corp's fourth quarter 2024 earnings call, the company reported impressive financial performance, surpassing its guidance with a net income of $9.9 million and diluted earnings per share of $0.98, a significant improvement from the prior year's net loss of $7.6 million. The company achieved a record-high loan portfolio of nearly $1.9 billion, growing by $73 million sequentially, and generated record quarterly revenue of $155 million, reflecting a 9.3% increase year-over-year. Their total revenue yield of 33.4% marked the highest in two years, driven by increased pricing, a shift to higher-margin loans, and enhanced credit performance. Operating efficiency improved, with the operating expense ratio dropping by 80 basis points to 14%. Despite a slight increase in the 30-plus-day delinquency rate to 7.7%, the net credit loss rate improved by 430 basis points to 10.8%, indicating better credit performance due to tighter underwriting. Looking ahead to 2025, the company plans a minimum 10% portfolio growth, anticipating continued improvement in credit quality and leveraging a more stable macroeconomic environment.Regional Management Corporate Events
Business Operations and StrategyFinancial Disclosures
Regional Management Unveils Growth Strategy for 2025
Positive
Feb 24, 2025
Regional Management Corp. announced its growth strategy and financial performance in a presentation for bankers and investors starting February 24, 2025. The company emphasized its geographic and product expansion, leveraging digital capabilities and data analytics to enhance customer acquisition and retention. With a strong balance sheet, Regional Management continues to drive growth through new state expansions and product developments, aiming to capture a larger share of the $91 billion market opportunity. The company reported significant revenue growth in 2024, outpacing general and administrative expenses, and highlighted its high customer satisfaction and loyalty as key strengths.
Business Operations and Strategy
Regional Management Announces Strategic Growth Initiatives
Positive
Dec 11, 2024
Regional Management Corp. outlined its strategic imperatives and growth initiatives in a recent presentation, highlighting its plans for geographic expansion, digital investments, and improved credit decisioning. The company aims for a 10% to 12% receivables growth in 2025 by enhancing its technological infrastructure, expanding its loan portfolio, and maintaining a strong balance sheet to support future growth and shareholder returns.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.