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On Thursday, Canaccord Genuity reaffirmed its positive stance on EZCORP (NASDAQ:EZPW) stock, maintaining a Buy rating and a $24.00 price target. According to InvestingPro data, the stock currently trades at $13.11, with analyst targets ranging from $17 to $24, suggesting significant upside potential. The company maintains a "GREAT" financial health score, supported by strong fundamentals. The endorsement comes after Canaccord analysts, led by Brian McNamara, conducted investor meetings in New York City with the top executives of the pawn shop operator, including CEO Lachlan Given and CFO Tim Jugmans.
In the meetings held last Tuesday, EZCORP’s management emphasized a strategic approach to capital allocation. They plan to prudently utilize the approximately $100 million in capital freed up from the recent retirement of their 2025 convertible notes. The company’s strong financial position is evident in its impressive current ratio of 4.04, indicating robust liquidity to meet short-term obligations. Analysts from Canaccord believe the company is poised to leverage these funds effectively, suggesting that a stock buyback could be a smart move given that the current share price is roughly 18% below the conversion price of the retired notes.
The company’s performance in Latin America was also a focal point of discussion. Canaccord’s analysts consider the region’s turnaround to be undervalued by the market and are starting to see substantial returns. This assessment aligns with InvestingPro’s analysis, which shows robust revenue growth of 8.14% over the last twelve months and indicates the stock is trading below its Fair Value. Get access to the full EZCORP Pro Research Report for comprehensive insights into the company’s valuation and growth prospects. They further addressed investor concerns regarding inventory growth, fluctuations in gold prices, and the rise of new competitive threats like buy now, pay later services, deeming these concerns to be overstated.
The recent record quarter reported by EZCORP in late April has contributed to Canaccord’s confidence in the company’s trajectory. Trading at a P/E ratio of 13.42, which appears attractive relative to its growth prospects, analysts expect the gap between EZCORP’s valuation and that of its peer, FirstCash (NASDAQ: NASDAQ:FCFS), to continue to narrow as the company’s positive developments become more widely recognized and appreciated by investors.
In other recent news, EZCORP reported its second-quarter 2025 earnings, showcasing a strong performance with an earnings per share (EPS) of $0.34, surpassing the forecast of $0.31. Despite this EPS beat, the company fell short on revenue expectations, reporting $306.32 million against a forecast of $310.46 million. The company achieved a record Q2 revenue of $318.9 million, marking a 12% year-on-year increase. Additionally, EZCORP completed the retirement of its 2.375% Convertible Senior Notes due 2025, with note holders converting approximately $97.0 million into about 6.1 million shares. Analyst firm BTIG initiated coverage on EZCORP with a Neutral rating, citing the company’s organic growth through increased store counts and higher loan balances. BTIG’s EPS estimates for EZCORP are 3% above consensus for 2025, but below for the subsequent years. The firm noted that the macroeconomic environment, including higher inflation, could benefit EZCORP’s business model. Despite these positive developments, EZCORP’s stock experienced a decline in after-hours trading following the earnings announcement.
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