January 23, 2013
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 pawn service and payday-loan company EZCORP (NASDAQ: EZPW ) popped as much as 14% following the release of its first-quarter earnings results.
So what: For the quarter, EZCORP's revenue jumped 11% to a record $277.1 million as profits declined 22% year-over-year. Relative to Wall Street, EZCORP slid past both revenue and EPS estimates by $8.2 million and $0.01. The company attributed its revenue strength to its recent Latin American acquisitions but pointed the finger at stagnant to slightly down gold prices as the reason profits dropped from last year. EZCORP's upcoming EPS guidance was right in-line with the Street's estimates.
Now what: A 22% drop in profits may not be exactly what investors had ordered for the first-quarter, but overall, EZCORP's business looks healthy, it's expanding internationally, and its business model makes a lot of sense in a slow growth or no-growth environment. At less than 10 times this year's earnings, even after today's pop, I feel EZCORP could still have plenty of room left to run.
Craving more input? Start by adding EZCORP to your free and personalized Watchlist so you can keep up on the latest news with the company.
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