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On Wednesday, BTIG initiated coverage on EZCORP (NASDAQ:EZPW), a provider of pawn loans in the United States and Latin America, assigning the stock a Neutral rating. According to InvestingPro data, EZCORP currently trades at an attractive P/E ratio of 13.4x and appears undervalued based on its Fair Value analysis. The firm’s analyst cited the company’s organic growth through increased store counts, higher loan balances, and expanded retail sales as key factors for this rating. According to BTIG, EZCORP’s same-store sales growth for pawn balance could potentially reach mid to high single digits year over year. Additionally, the expansion of store numbers is expected to contribute approximately another 5% to the growth in pawn loans outstanding (PLO).
The firm’s earnings per share (EPS) estimates for EZCORP stand 3% above the consensus for the year 2025, but 1% below for 2026, and 5% below for 2027. The analyst highlighted the favorable macroeconomic environment for the pawn lending industry, which often sees a boost during weaker economic times. This outlook aligns with EZCORP’s recent performance, as InvestingPro data shows robust revenue growth of 8.14% and an impressive year-to-date return of nearly 16%. Although BTIG is not predicting a recession in the US or Latin America, regions where EZCORP operates, it noted that wage growth has stabilized in these areas.
Increased consumer cash constraints and higher inflation in both the U.S. and Latin America were also mentioned as contributing factors to the demand for pawn loans and EZCORP’s second-hand retail products. The analyst’s commentary suggests that these economic conditions could potentially benefit EZCORP’s business model, as consumers may seek alternative financing options and affordable retail goods.
The analyst’s neutral stance reflects a cautious optimism about EZCORP’s potential for growth against the backdrop of the current economic landscape. BTIG’s assessment points to the company’s ability to capitalize on its organic growth strategies and the external economic factors that could drive consumer behavior in favor of EZCORP’s services. InvestingPro analysis supports this view, assigning EZCORP a "GREAT" financial health score, with particularly strong marks in relative value and growth metrics. For deeper insights into EZCORP’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, EZCORP Inc. reported its second-quarter 2025 earnings, showing mixed results. The company achieved an earnings per share (EPS) of $0.34, surpassing the forecast of $0.31, but missed revenue expectations, reporting $306.32 million against a forecast of $310.46 million. Despite this, EZCORP recorded a record Q2 revenue of $318.9 million, marking a 12% increase from the previous year. Additionally, the company completed the retirement of its outstanding 2.375% Convertible Senior Notes due 2025, converting approximately $97.0 million of the notes into about 6.1 million shares of Class A Common Stock.
EZCORP also repaid the remaining principal balance in cash, amounting to roughly $6.4 million. The company’s focus on expanding its Pawn Loan Outstanding and managing inventory effectively continues, as they explore mergers and acquisitions in the U.S. and Latin America. Analysts have projected future EPS growth, with forecasts suggesting $0.35 for Q3 and $0.37 for Q4 of 2025. The company is also seeing growth in its digital channels and rewards programs, indicating potential future opportunities.
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