World Acceptance (NASDAQ:WRLD) Announces Quarterly Earnings Results, Beats Estimates By $1.54 EPS

Key Points

• World Acceptance beat quarterly expectations, reporting adjusted EPS of $2.12 versus the $0.58 consensus estimate. The result was helped by a 4.8% increase in revenue.
• Credit quality improved during the quarter, with annualized net charge-offs falling to 18.2% from 19.2% a year earlier and front-end delinquency improving to 18.1%.
• The stock jumped sharply after the earnings release, rising 15.7% in mid-day trading as investors reacted to the stronger-than-expected results and better portfolio performance.

World Acceptance (NASDAQ:WRLD - Get Free Report) announced its quarterly earnings data on Friday. The credit services provider reported $2.12 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.58 by $1.54, FiscalAI reports. World Acceptance had a return on equity of 9.36% and a net margin of 5.98%.

Here are the key takeaways from World Acceptance's conference call:

• World Acceptance reported adjusted EPS of $2.12 for the first quarter, supported by a 4.8% increase in revenue and a 13.4% decline in provision expense.
• The company said credit quality improved, with annualized net charge-offs falling to 18.2% from 19.2% a year ago and front-end delinquency improving to 18.1% from 19.2%.
• Management attributed revenue growth to continued loan portfolio expansion and a 91-basis-point increase in interest and insurance yields, indicating stronger portfolio returns.
• Executives said they tightened underwriting about six months ago and began easing slightly about a month ago, while still describing the credit box as conservative.
• Management said demand remains robust overall, even though bookable applications declined somewhat after the tighter credit standards were implemented.

World Acceptance Stock Up 15.7%

Shares of NASDAQ WRLD traded up $28.34 during mid-day trading on Friday, reaching $209.42. The company had a trading volume of 116,706 shares, compared to its average volume of 134,366. World Acceptance has a twelve month low of $110.00 and a twelve month high of $227.68. The company has a debt-to-equity ratio of 1.26, a quick ratio of 22.99 and a current ratio of 22.99. The stock has a market capitalization of $971.71 million, a PE ratio of 28.60 and a beta of 1.13. The stock's 50 day moving average is $182.26 and its 200-day moving average is $153.63.

Insider Transactions at World Acceptance

In other World Acceptance news, insider Luke J. Umstetter sold 1,000 shares of the company's stock in a transaction dated Friday, June 12th. The stock was sold at an average price of $181.66, for a total value of $181,660.00. Following the transaction, the insider directly owned 28,245 shares of the company's stock, valued at $5,130,986.70. This represents a 3.42% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, Director Benjamin E. Robinson III sold 2,031 shares of the firm's stock in a transaction dated Monday, June 29th. The stock was sold at an average price of $222.77, for a total value of $452,445.87. Following the sale, the director directly owned 4,836 shares of the company's stock, valued at $1,077,315.72. This trade represents a 29.58% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 5,576 shares of company stock valued at $1,149,890 in the last three months. 41.60% of the stock is currently owned by insiders.

Hedge Funds Weigh In On World Acceptance

A number of hedge funds have recently added to or reduced their stakes in the company. iSAM Funds UK Ltd acquired a new stake in World Acceptance in the third quarter valued at approximately $30,000. Russell Investments Group Ltd. grew its position in World Acceptance by 241.2% in the third quarter. Russell Investments Group Ltd. now owns 331 shares of the credit services provider's stock worth $56,000 after acquiring an additional 234 shares in the last quarter. Tower Research Capital LLC TRC increased its stake in shares of World Acceptance by 103.2% during the 2nd quarter. Tower Research Capital LLC TRC now owns 569 shares of the credit services provider's stock worth $94,000 after purchasing an additional 289 shares during the last quarter. Aquatic Capital Management LLC acquired a new position in shares of World Acceptance during the 3rd quarter worth $138,000. Finally, Brevan Howard Capital Management LP bought a new position in shares of World Acceptance during the 3rd quarter valued at $215,000. Institutional investors and hedge funds own 83.63% of the company's stock.

Analysts Set New Price Targets

Several equities analysts have weighed in on the company. Wall Street Zen cut World Acceptance from a "buy" rating to a "hold" rating in a research note on Sunday, June 28th. Weiss Ratings reissued a "hold (c)" rating on shares of World Acceptance in a research report on Wednesday, June 24th. Two analysts have rated the stock with a Hold rating, According to MarketBeat, the company has a consensus rating of "Hold".

World Acceptance Company Profile

World Acceptance Corporation NASDAQ: WRLD is a consumer finance company headquartered in Greenville, South Carolina. Founded in 1972, the company provides credit solutions to underserved customers who may have limited access to traditional banking services. Over the decades, World Acceptance has built a reputation for tailored lending that emphasizes responsible underwriting and personalized customer service.

The company's core product offerings include short-term installment loans designed to meet the immediate financial needs of its clients.

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