EZCORP (EZPW) Stock Forecast & Price Target

EZCORP Inc. has demonstrated strong financial performance, with a notable +28% increase in LatAm EBITDA for Q3, contributing to 24% of the company's overall EBITDA. Additionally, the company recorded an 11% rise in sales, surpassing consensus expectations, driven by a corresponding 11% increase in pawn loans outstanding (PLO), which is a critical factor for revenue generation. Improvements in merchandise margins, rising to 35.8%, indicate effective management of inventory and sales strategies within the targeted range, supporting a positive outlook for the company.

EZCORP has experienced ongoing inventory issues, with inventory turnover lagging behind its competitors and an increase in aged general merchandise, which has contributed to the stock's underperformance. The turnover rate has declined moderately, reaching approximately 2.3 times in the most recent quarter, attributed to a higher percentage of jewelry in inventory, which generally has longer sales cycles. Additionally, potential vulnerabilities include fluctuations in foreign currencies that could negatively affect assets and earnings, as well as risks from unfavorable regulatory changes and decreasing gold prices, all contributing to a negative outlook for the company’s stock.