EZCORP (EZPW) Stock Forecast & Price Target

EZCORP has demonstrated robust revenue growth, driven primarily by an increase in pawn loans outstanding, which reached $274.8 million at the end of F1Q25, reflecting a 13% year-over-year increase. Jewelry sales, although a smaller portion of total revenues, increased significantly by 23% year-over-year, contributing $61.1 million to FY24 revenues. The company is positioned for continued expansion, with plans to add approximately 40 storefronts in FY25, contributing to projected revenue growth from $1.16 billion in FY24 to $1.33 billion in FY26, bolstered by increasing demand for short-term credit and strong performance metrics compared to competitors.

The financial outlook for EZCORP is negatively influenced by several key factors, primarily the company's modest pawn loan originations (PLO) growth of 31%, which falls short of the industry leader FirstCash's 33%. Additionally, EZCORP's retail merchandise margin at 34.6% did not meet the consensus estimate of 35.4%, and while its scrap margin exceeded expectations at 22.7%, this positive was offset by concerns over potential declines in jewelry transaction volumes and gold prices, which could significantly impact profitability since jewelry constitutes over half of EZCORP’s inventory mix. Furthermore, the competitive landscape in Latin America presents additional challenges for the business, along with regulatory risks and potential impairments that could weaken the company's balance sheet, contributing to a grim financial outlook.