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NEW YORK (
TheStreet Ratings) -- Every trading day TheStreet Ratings' stock model reviews the investment ratings on around 4,600 U.S. traded stocks for potential upgrades or downgrades based on the latest available financial results and trading activity.
TheStreet Ratings released rating changes on 83 U.S. common stocks for week ending November 2, 2012. 45 stocks were upgraded and 38 stocks were downgraded by our stock model.
Rating Change #10EZCorp Inc (EZPW) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.
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Highlights from the ratings report include:
EZPW's revenue growth has slightly outpaced the industry average of 10.8%. Since the same quarter one year prior, revenues rose by 12.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
EZPW's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.66, which clearly demonstrates the ability to cover short-term cash needs.
The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Consumer Finance industry average. The net income increased by 7.5% when compared to the same quarter one year prior, going from $26.53 million to $28.52 million.
Net operating cash flow has significantly decreased to $12.42 million or 66.51% when compared to the same quarter last year. Despite a decrease in cash flow EZCORP INC is still fairing well by exceeding its industry average cash flow growth rate of -95.76%.
EZPW has underperformed the S&P 500 Index, declining 24.19% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
EZCORP, Inc. provides specialty consumer financial services. The company has a P/E ratio of 7.1, below the S&P 500 P/E ratio of 17.7. EZCorp has a market cap of $948.1 million and is part of the services sector and specialty retail industry. Shares are down 25.4% year to date as of the close of trading on Friday.
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