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World Acceptance Corp (WRLD)
NASDAQ:WRLD
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World Acceptance
(NASDAQ:WRLD)
77Outperform
World Acceptance (WRLD) vs. S&P 500 (SPY)
Market Cap
$725.12M
Dividend YieldN/A
Average Volume (3M)26.71K
Price to Earnings (P/E)8.6
Beta (1Y)1.65
Revenue Growth-2.78%
EPS Growth24.39%
CountryUS
Employees2,872
SectorFinancial
Sector Strength79
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)14.13
Shares Outstanding5,746,677
10 Day Avg. Volume34,088
30 Day Avg. Volume26,714
Financial Highlights & Ratios
PEG Ratio0.35
Price to Book (P/B)N/A
Price to Sales (P/S)13.91
Price to Cash Flow (P/CF)3.00
P/FCF Ratio2.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$110.00Price Target Upside-9.56% Downside
Rating ConsensusHold
Number of Analyst Covering0
World Acceptance Business Overview & Revenue Model
Company DescriptionWorld Acceptance Corporation, together with its subsidiaries, engages in small-loan consumer finance business. The company offers short-term small installment loans, medium-term larger installment loans, related credit insurance, and ancillary products and services to individuals. It also provides automobile club memberships to its borrowers; and income tax return preparation and electronic filing services. In addition, the company markets and sells credit life, credit accident and health, credit property and auto, unemployment, and accidental death and dismemberment insurance in connection with its loans. It serves individuals with limited access to other sources of consumer credit, such as banks, credit unions, other consumer finance businesses, and credit card lenders. As of March 31, 2022, it operated 1,167 branches in Alabama, Georgia, Idaho, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, South Carolina, Tennessee, Texas, Utah, and Wisconsin. World Acceptance Corporation was founded in 1962 and is headquartered in Greenville, South Carolina.
How the Company Makes MoneyWorld Acceptance Corporation generates revenue primarily through the issuance of small consumer installment loans. These loans are typically offered to individuals who may not have access to traditional banking services or who require immediate financial assistance. The company earns money through the interest charged on these loans, as well as fees related to loan origination and servicing. Additionally, World Acceptance offers credit insurance and ancillary products, which contribute to its revenue streams. The company’s earnings are influenced by factors such as interest rates, credit risk management, and regulatory changes in the consumer finance industry.
World Acceptance Financial Statement Overview
Summary
World Acceptance presents a strong financial profile with excellent profitability and cash flow generation. The company's recent elimination of debt strengthens its balance sheet, though historical leverage could be a concern if debt levels rise again. Revenue volatility needs addressing to ensure sustained growth.Income Statement
World Acceptance shows strong profitability with an impressive gross profit margin and EBIT margin for TTM (Trailing-Twelve-Months), reflecting efficient cost management. However, revenue growth has been inconsistent, with a significant decline in the last annual period, which might raise concerns about future top-line expansion.78
Positive
Balance Sheet
The company maintains a robust balance sheet with no total debt in the TTM period, contributing to a solid equity position. The equity ratio is healthy, indicating financial stability. However, past periods show high leverage, which could pose risks if debt levels increase again.85
Very Positive
Cash Flow
World Acceptance demonstrates strong cash flow performance, with substantial free cash flow relative to net income in the TTM period. The operating cash flow to net income ratio is excellent, indicating efficient cash generation. However, investment cash flows are significantly negative, which could impact future liquidity.82
Very Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 139.05B | 524.98M | 616.56M | 585.65M | 530.84M | 590.62M | Gross Profit |
| 124.77B | 562.32M | 357.09M | 399.44M | 444.60M | 408.89M | EBIT |
| 66.14B | 151.65M | 77.61M | 105.67M | 111.40M | 35.89M | EBITDA |
| 127.43M | 158.53M | 88.52M | 110.68M | 149.52M | 47.07M | Net Income Common Stockholders |
| 80.52M | 77.35M | 21.23M | 53.92M | 88.28M | 28.16M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 5.45M | 11.84M | 16.51M | 19.24M | 15.75M | 11.62M | Total Assets |
| 593.05M | 1.06B | 1.12B | 1.22B | 954.27M | 1.03B | Total Debt |
| 93.64M | 577.95M | 679.00M | 779.85M | 496.73M | 553.86M | Net Debt |
| 88.20M | 566.11M | 662.49M | 760.61M | 480.98M | 542.24M | Total Liabilities |
| 210.10M | 631.92M | 732.09M | 845.27M | 549.34M | 613.60M | Stockholders Equity |
| 382.95M | 424.43M | 385.23M | 373.02M | 404.93M | 414.49M |
| Cash Flow | Free Cash Flow | ||||
| 160.47B | 259.85M | 285.73M | 275.41M | 215.27M | 269.70M | Operating Cash Flow |
| 163.29B | 265.78M | 291.55M | 281.48M | 226.95M | 280.98M | Investing Cash Flow |
| -200.79B | -135.14M | -180.58M | -460.92M | -55.20M | -256.03M | Financing Cash Flow |
| 41.24B | -135.32M | -113.70M | 182.93M | -140.23M | 905.40K |
World Acceptance Technical Analysis
Negative
121.63
Price Trends
131.63
Negative
125.30
Negative
122.26
Negative
Market Momentum
-0.70
Negative
51.77
Neutral
58.16
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WRLD, the sentiment is Negative. The current price of 121.63 is below the 20-day moving average (MA) of 124.33, below the 50-day MA of 131.63, and below the 200-day MA of 122.26, indicating a bearish trend. The MACD of -0.70 indicates Negative momentum. The RSI at 51.77 is Neutral, neither overbought nor oversold. The STOCH value of 58.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WRLD.
World Acceptance Risk Analysis
World Acceptance disclosed 46 risk factors in its most recent earnings report. World Acceptance 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
World Acceptance Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $478.70M | 2.18 | 17.96% | 3.28% | 17.07% | -8.81% | |
77 Outperform | $725.12M | 8.61 | 19.28% | ― | -2.78% | 24.39% | |
76 Outperform | $689.41M | 9.75 | 23.00% | ― | 13.46% | 10.43% | |
76 Outperform | $831.22M | 13.55 | 10.71% | ― | 8.95% | 71.41% | |
73 Outperform | $305.96M | 7.52 | 12.14% | 3.86% | 6.73% | 151.08% | |
64 Neutral | $13.46B | 9.44 | 9.34% | 4.72% | 16.14% | -8.80% | |
61 Neutral | $713.15M | 9.33 | 6.13% | ― | 39.47% | ― |
* Financial Sector Average
Performance Comparison
WRLD
World Acceptance
121.63
-18.41
-13.15%
EZPW
EZCORP
15.49
4.23
37.57%
PRAA
Pra Group
16.66
-8.76
-34.46%
RM
Regional Management
29.57
5.13
20.99%
ATLC
Atlanticus Holdings
52.66
25.21
91.84%
YRD
Yiren Digital
5.51
0.41
8.04%
World Acceptance Earnings Call Summary
Earnings Call Date: Jan 28, 2025 | % Change Since: -5.97% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call presents a positive outlook with substantial improvements in portfolio yields, customer base growth, and approval rates, indicating effective strategic adjustments and a return to growth. However, challenges remain in managing the large loan portfolio and limitations in refinance rates.Highlights
Improved Portfolio Yields
Yields have improved by over 200 basis points year-over-year. The improvement is driven by better performance in both non-refinance and refinance customer segments.
Portfolio Growth and Stabilization
The loan portfolio grew by 6.6% in the third quarter compared to 1.5% in the same period of fiscal '24 and a decline of 2.8% in fiscal '23. The portfolio size has returned to pre-pandemic norms, reversing previous trends of decline.
Customer Base Expansion
The customer base increased by 4% year-over-year, reversing a previous decline of 2.2% in 2024 and 14% in fiscal '23. In the third quarter, there was a 7% growth in the customer base.
Improved Approval and Credit Quality
Approval rates for new customers increased by 47% compared to fiscal '24 and by 80% compared to fiscal '23, while maintaining low first payment default rates.
Lowlights
Large Loan Portfolio Challenges
There is a continued opportunity to improve delinquency and charge-off rates related to a large loan portfolio, which stems from extensive investments in large loans during fiscal years '21 and '22.
Refinance Rate Limitations
The company does not anticipate returning to the high refinance rates seen pre-2010 or even pre-2015, due to longer average loan terms.
Company Guidance
During the third quarter of fiscal year 2025, World Acceptance Corporation reported portfolio growth of 6.6%, a significant increase compared to 1.5% growth in the same period of fiscal 2024, and a 2.8% decline in fiscal 2023. The company's customer base grew by 7%, surpassing the 3% growth recorded in the prior year and aligning with pre-pandemic averages of 6.3%. Yields improved by over 200 basis points year-over-year, aided by a strategic shift toward smaller loans and a higher credit quality customer base. The loan portfolio, which had shrunk by 10% year-over-year by the end of the third quarter last year, has now stabilized, returning to its previous size with a 4% increase in customer base year-over-year. Approval rates for new customers rose by 47% compared to fiscal 2024 and by 80% compared to fiscal 2023. The company also achieved a 5.1% reduction in average balance year-over-year from December 31, 2023, and a 12.6% decrease from December 31, 2022. Despite these growth metrics, the corporation remains vigilant about potential improvements in delinquency and charge-off rates, especially concerning their large loan portfolio.World Acceptance Corporate Events
Business Operations and StrategyFinancial Disclosures
World Acceptance Reports Revenue Growth Despite Income Drop
Neutral
Jan 28, 2025
On January 28, 2025, World Acceptance Corporation announced its financial results for the third quarter ending December 31, 2024. The company reported an increase in total revenues to $138.6 million, driven by improved loan growth and a focus on credit quality. Despite a decrease in net income to $13.4 million due to higher provisions for credit losses, the company recorded a net income per diluted share of $2.45. The portfolio experienced a sequential increase in gross loans, and there was an improvement in recency delinquency rates. World Acceptance Corporation’s strategic focus on monitoring performance and investing in top customers has strengthened its financial position going forward.
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.