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Investing.com - Texas Capital Securities has initiated coverage on EZCORP Inc. (NASDAQ:EZPW) with a Buy rating and a price target of $20.00, citing the company’s solid execution and countercyclical appeal. The company has demonstrated strong momentum with a 12% return in the past week and maintains a "GREAT" overall financial health score according to InvestingPro analysis.
The firm highlighted EZCORP’s business model improvements, including enhanced inventory management, loan analysis, online bill payments, and a shift toward general and luxury merchandising beyond jewelry lending. Texas Capital noted the company has achieved an optimal balance between pawn-loan levels and retail sales of bought and forfeited collateral. This operational efficiency is reflected in the company’s strong financial position, with liquid assets significantly exceeding short-term obligations and a healthy current ratio of 6.31.
EZCORP has demonstrated stronger performance metrics with higher pawn loan growth per store, improved inventory turnover, reduced aged inventory, and more stable gross margins, according to the research note. The firm expects continued growth in both U.S. operations and Latin America, where expansion has outpaced domestic growth.
Texas Capital emphasized that EZCORP’s e-commerce initiatives at existing stores will likely boost sales, while streamlined loan processes should drive storefront growth and expansion of its luxury merchandise and Latin American businesses. The rollout of EZ+ apps that have increased consumer loyalty in the U.S. is expected to benefit Latin American operations as well.
The research firm believes EZCORP currently trades at a discount to competitor FirstCash (NASDAQ:FCFS) at approximately 5x FY26E EBITDA, and expects it to re-rate to a multiple of 7x or higher, supporting the $20 price target. InvestingPro analysis suggests EZCORP is currently undervalued, trading at an attractive P/E ratio of 8.4x while maintaining solid revenue growth of 8.3% over the last twelve months. For deeper insights into EZCORP’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, EZCORP Inc reported impressive fiscal third-quarter results for 2025, surpassing analyst expectations. The company achieved an earnings per share (EPS) of $0.33, significantly higher than the anticipated $0.25, representing a 32% surprise. Revenue also set a record high at $319.9 million, exceeding the forecast of $302.51 million. These results highlight EZCORP’s strong financial performance in the recent quarter. Analysts had projected lower figures, making the company’s achievements noteworthy in the investment community. The positive earnings and revenue figures are among the major developments for EZCORP in recent times. Investors and analysts will likely continue to monitor the company’s performance closely in the upcoming quarters.
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