FCFS - FirstCash Stands To Benefit From Pressures On Both Consumers And Other Lenders

2024-04-08 21:15:37 ET

Summary

• FirstCash's access to attractively priced capital and ability to expand credit availability when many rivals are forced to pull back is a key advantage right now.
• Regulatory changes targeting banks' capital and fees could further reduce credit availability and drive more customers toward FirstCash's small-value loans.
• The pawn business, which generates the majority of profits, has seen double-digit growth in loans outstanding and fees, helped by pressures on both customers and other credit providers.
• FirstCash isn't as cheap as I'd like, but should still generate a respectable return from here with execution-driven upside.

Trends have been solidly in FirstCash ’s (FCFS) favor in a year or so since I last wrote about this leading pawn lender and lease-to-own financier. Not only has inflation put some pressure on household budgets, but alternate consumer finance companies have in many cases pulled back on their own activities due to rising losses and higher capital costs – once again highlighting FirstCash’s access to attractively priced capital as a key long-term factor....

For further details see: