FirstCash (NASDAQ:FCFS) Stock Price Down 11% – Here’s Why

FirstCash Holdings, Inc. (NASDAQ:FCFS) shares traded down 11% during mid-day trading on Thursday. The company traded as low as $194.34 and last traded at $192.9610. 85,657 shares traded hands during mid-day trading, a decline of 77% from the average daily volume of 374,353 shares. The stock had previously closed at $216.75.

Trending Headlines about FirstCash

Here are the key news stories impacting FirstCash this week:

• Positive Sentiment: Record earnings and revenue: Third-quarter revenue increased 17.7% year over year to $1.10 billion, while adjusted EPS of $2.68 exceeded the $2.63 consensus estimate. GAAP net income rose 22% to $101.2 million, and adjusted EBITDA increased 18% to $213.0 million. FirstCash third-quarter results
• Positive Sentiment: Pawn operations remain strong: Revenue and segment income from the U.S., Latin American and U.K. pawn businesses each benefited from solid growth, with combined pawn revenue up 28%. Pawn receivables reached a record $908 million, while the company added 14 stores during the quarter and 42 year to date.
• Positive Sentiment: Shareholder returns increased: FirstCash raised its quarterly dividend 10% to $0.46 per share and repurchased $123 million of stock in the quarter, bringing year-to-date buybacks to $250 million.
• Positive Sentiment: Analyst remains bullish: TD Cowen reduced its price target from $242 to $235 but maintained a “Buy” rating, implying substantial potential upside based on the referenced price.
• Neutral Sentiment: Growth outlook is positive but mixed: Management expects continued double-digit growth in pawn operations and is pursuing the Ramsdens acquisition, which could add more than 175 U.K. locations. However, completion remains subject to antitrust approval and other closing conditions.
• Negative Sentiment: AFF remains a drag: Gross transaction volume in the retail POS payment-solutions segment fell 15% year over year, while net revenue declined 20%. Management expects fourth-quarter volume to decrease in the mid-teens percentage range and net revenue to fall 15%–20%, reflecting weakness in furniture and other discretionary retail.
• Negative Sentiment: Legal overhang: The Law Offices of Frank R. Cruz announced an investigation into potential securities-law violations related to company disclosures on October 22. The announcement does not establish wrongdoing, but it adds uncertainty and may weigh on sentiment. FirstCash securities investigation

Wall Street Analysts Forecast Growth

Several equities research analysts have recently weighed in on FCFS shares. Loop Capital raised FirstCash from a “hold” rating to a “buy” rating and set a $255.00 price objective for the company in a research report on Monday, August 10th. Weiss Ratings lowered shares of FirstCash from a “buy (b+)” rating to a “buy (b)” rating in a research report on Friday. Wall Street Zen cut shares of FirstCash from a “buy” rating to a “hold” rating in a research note on Saturday, October 10th. TD Cowen cut their target price on shares of FirstCash from $242.00 to $235.00 and set a “buy” rating for the company in a research note on Friday. Finally, Stephens reissued an “overweight” rating and issued a $250.00 price target on shares of FirstCash in a report on Thursday, October 1st. Five research analysts have rated the stock with a Buy rating and one has issued a Hold rating to the company’s stock. Based on data from MarketBeat.com, FirstCash has a consensus rating of “Moderate Buy” and an average price target of $247.50.

FirstCash Price Performance

The company has a market cap of $7.49 billion, a price-to-earnings ratio of 18.72 and a beta of 0.55. The company has a fifty day moving average price of $216.47 and a two-hundred day moving average price of $216.00. The company has a current ratio of 4.81, a quick ratio of 3.51 and a debt-to-equity ratio of 1.08.

FirstCash (NASDAQ:FCFS) last issued its earnings results on Thursday, October 22nd. The company reported $2.68 EPS for the quarter, beating analysts’ consensus estimates of $2.63 by $0.05. The business had revenue of $1.10 billion during the quarter, compared to analyst estimates of $1.07 billion. FirstCash had a return on equity of 20.17% and a net margin of 9.48%. FirstCash’s revenue was up 17.7% on a year-over-year basis. During the same period in the prior year, the company posted $1.86 earnings per share. As a group, equities research analysts anticipate that FirstCash Holdings, Inc. will post 11.59 EPS for the current fiscal year.

FirstCash Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, November 24th. Shareholders of record on Friday, November 13th will be issued a $0.46 dividend. This is a boost from FirstCash’s previous quarterly dividend of $0.42. The ex-dividend date of this dividend is Friday, November 13th. This represents a $1.84 annualized dividend and a yield of 1.1%. FirstCash’s payout ratio is presently 19.18%.

Insider Buying and Selling at FirstCash

In related news, COO Thomas Stuart sold 5,348 shares of the company’s stock in a transaction dated Monday, August 17th. The shares were sold at an average price of $214.63, for a total value of $1,147,841.24. Following the sale, the chief operating officer owned 135,498 shares of the company’s stock, valued at $29,081,935.74. The trade was a 3.80% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO R. Orr sold 2,000 shares of the company’s stock in a transaction dated Monday, August 17th. The shares were sold at an average price of $216.00, for a total transaction of $432,000.00. Following the completion of the sale, the chief financial officer directly owned 34,734 shares in the company, valued at approximately $7,502,544. The trade was a 5.44% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 14,098 shares of company stock worth $3,051,281. Corporate insiders own 2.86% of the company’s stock.

Institutional Investors Weigh In On FirstCash

A number of institutional investors have recently added to or reduced their stakes in the stock. Harbor Investment Advisory LLC acquired a new position in shares of FirstCash during the first quarter worth approximately $26,000. Geneos Wealth Management Inc. acquired a new stake in shares of FirstCash in the first quarter valued at approximately $29,000. Mitsubishi UFJ Asset Management Co. Ltd. acquired a new stake in shares of FirstCash in the second quarter valued at approximately $34,000. Assetmark Inc. raised its position in FirstCash by 113.2% in the 1st quarter. Assetmark Inc. now owns 194 shares of the company’s stock worth $36,000 after purchasing an additional 103 shares during the last quarter. Finally, USA Financial Formulas bought a new position in FirstCash in the 3rd quarter worth approximately $50,000. 80.30% of the stock is owned by institutional investors and hedge funds.

FirstCash Company Profile

FirstCash Holdings, Inc is a specialty financial services and retail company that operates pawn stores in the United States and Mexico. Through its pawn operations, the company provides short-term, collateral-backed loans to consumers who pledge personal property as security. Customers can reclaim their pledged items by repaying the loan and applicable fees within the required period.

The company also generates revenue by selling merchandise that has been forfeited on pawn loans or acquired through other purchasing activities.