Key Takeaways
- FirstCash shares fell 13% today and EZCORP’s fell 10%, even though FirstCash beat third-quarter estimates for revenue and adjusted earnings and raised its dividend 10%.
- The selloff looks like an overreaction for a business that grew pawn revenue 28% and has set records every quarter this year.
- Neither company gave a reason, but gold fell nearly 2% this morning, and a lower gold price can mean smaller pawn loans and less money from scrap gold.
- FirstCash went into the report at 18x forward earnings, above its five-year average of 16x, so the thing to watch is whether gold’s slide leads analysts to cut their estimates.
FirstCash (FCFS) just posted a record third quarter, beat Wall Street’s estimates on revenue and earnings, and raised its dividend 10%.
Its stock is down 13% today anyway. And pawn rival EZCORP (EZPW) is down 10% right alongside it.
Tough crowd.
What exactly happened
FirstCash released its results before the open this morning:
- Adjusted EPS of $2.68, against the $2.63 analysts expected
- Revenue of $1.10 billion, against $1.07 billion
- Pawn revenue up 28%, with pawn receivables at a record $908 million
- A 10% dividend raise, to $0.46 a share each quarter
CEO Rick Wessel said FirstCash “delivered another outstanding quarter of operating results,” with double-digit growth in same-store pawn receivables and fees in every region.
And analysts expect the growth to keep coming, with revenue climbing from $3.66 billion in 2025 to $4.73 billion in 2027…
Plus: the bigger dividend is well-covered. Dividends took just 13% of FirstCash’s $531 million of free cash flow in fiscal 2025.
TIKR tracks 4 analysts on FirstCash. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on FirstCash, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See FirstCash’s Analyst Ratings
Blame gold, probably
Neither company said anything to explain the drop, and EZCORP had no news of its own today. But gold fell nearly 2% this morning, slipping below $4,100 an ounce.
That matters for pawn shops, which lend heavily against gold jewelry. When gold falls, each piece is worth less as collateral, so loans get smaller, and the gold they sell for scrap brings in less. So my guess, and this is pure speculation, is that investors are selling both stocks on worries that a gold slide eats into earnings.
The drop makes FirstCash cheaper than usual
Expectations were running high going in. At yesterday’s close, FirstCash traded at 18x forward earnings, above its five-year average of 16x…
Today’s drop takes it closer to 15x. That’s below the average and far from its 25x peak in October 2021.
The selloff looks overdone
So investors got another record quarter and sold anyway.
My take: that’s an overreaction. FirstCash now costs less than usual relative to its earnings. It’s still growing pawn revenue 28% and adding stores, with over 175 more in the U.K. if its deal for Ramsdens closes.
Of course, if gold keeps sliding, analysts could start cutting their estimates, and those are the numbers to watch from here.
So what is FirstCash stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what FirstCash could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
