JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
On Wednesday, Keefe, Bruyette & Woods (KBW) adjusted their outlook on Regional Management Corp (NYSE:RM), a consumer finance company, by increasing their price target from $33.00 to $38.00 while maintaining a Market Perform rating. The revision followed the company’s fourth-quarter financial results for 2024, which surpassed expectations.
Sanjay Sakhrani of KBW noted that despite a positive start to 2025, they have revised their earnings per share (EPS) estimates for 2025 and 2026. The new forecasts are set at $5.03 and $6.50, down from $5.50 and $7.00, respectively. This adjustment reflects the need for higher expenses and provisions to support the anticipated robust loan growth. The elevated price target is based on applying an approximate 6x price-to-earnings (P/E) multiple on the revised 2026 EPS estimate. InvestingPro analysis reveals that 5 analysts have recently revised their earnings estimates downward, while the current P/E ratio stands at 8.46x.
Regional Management reported strong results for the fourth quarter of 2025, which were above analyst predictions. The management of Regional Management has expressed confidence in the company’s capability to increase its bottom line by more than 30% in 2025. However, the expected portfolio expansion of over 10% is likely to pose challenges due to the necessary upfront Current Expected Credit Losses (CECL) reserve build. Despite these challenges, earnings for the year are still projected to see a significant increase. InvestingPro’s comprehensive analysis indicates the company maintains a strong financial health score of 2.9 (GOOD), with liquid assets exceeding short-term obligations.
The company’s strategic approach to growth, described as a barbell strategy, has been yielding favorable outcomes. However, credit metrics for Regional Management remain high. KBW’s decision to maintain a Market Perform rating indicates a cautious stance, as analysts await a more advantageous entry point for investing in the stock. Based on InvestingPro’s Fair Value analysis, the stock appears slightly overvalued at current levels, with revenue growing at 6.62% year-over-year. For deeper insights into RM’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Regional Management Corp. has announced a stock repurchase program, authorizing the buyback of up to $30 million of its outstanding common stock. This initiative is part of the company’s strategy to manage its capital and return value to shareholders, with the authorization effective immediately and continuing through December 31, 2026. The company’s President and CEO, Robert W. Beck, stated that the decision reflects strong performance, liquidity, and confidence in future prospects. Regional Management has also outlined growth expectations for 2025, targeting a 10% to 12% increase in ending net receivables, an improvement from the approximately 6% growth rate in 2024. This anticipated growth is attributed to positive credit performance and favorable macroeconomic conditions, such as lower inflation and low unemployment rates. The company has expanded into eight new states since 2020, increasing its addressable market by over 80%. Plans include opening 10 new branches in late 2024 and early 2025, with up to another 10 branches planned for the second half of 2025. The timing and volume of stock repurchases will depend on various factors, including market conditions and legal requirements. Regional Management’s expansion focuses on its auto-secured and small loan portfolios, expected to drive portfolio growth.
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