Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why EZCORP Shares Sank

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of pawnshop operator EZCORP (Nasdaq: EZPW  ) plunged 14% today after its quarterly results and full-year outlook disappointed Wall Street.

So what: EZCORP's second-quarter revenue climbed a solid 20%, but a miss on the bottom line -- EPS of $0.73 versus the consensus of $0.76 -- is triggering concerns over its long-term profitability. Management noted that customers have been using their general merchandise, as opposed to gold, to meet their quick-cash needs, which would likely work to pressure margins and delay income.

Now what: Thanks to those headwinds, EZCORP was forced to cut its full-year EPS outlook about 6% to $2.85 to $2.95. "We expect earnings growth in the back half of the year to be slightly slower than we originally expected," CEO Paul Rothamel cautioned. "Nevertheless, the fundamentals of all our cash solutions businesses, including our inventory and loan yields, remain strong and we are filling the pipeline with new stores, new products, and additional talent." With the stock now flirting with its 52-week low and trading at a forward P/E of nine, buying into that optimism seems like a decent move.

Interested in more info on EZCORP? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1867028, ~/Articles/ArticleHandler.aspx, 10/22/2016 10:05:43 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
EZPW $10.86 Down -0.09 -0.82%
EZCORP CAPS Rating: ***