Ezcorp, Inc (EZPW) is benefiting from the down economy as consumers hock their goods for quick access to cash. The analyst community is bullish on the company’s future, projecting 17% earnings growth in the next-year period.

Company Description

Ezcorp, Inc., together with its subsidiaries, provides pawn loans that are collateralized by personal property such as power tools and musical instruments. At the end of 2007 the company controlled 298 pawn stores and 433 EZMONEY stores. Ezcorp has a market cap of $653 million.

Industry Trend

With the domestic economy in shambles and consumers strapped for cash, Americans are getting creative and selling personal possessions at local pawn shops to satisfy their needs. This dynamic helped Ezcorp produce excellent fourth-quarter results, reported on Nov 8.

Fourth-Quarter Results

Revenue was up 19% from last year to $123.4 million. Net income jumped 44% to $16 million, up from $11.2 million last year. This produced earnings of 37 cents per share, ahead of analyst estimates by 3 cents.

Consistent Results

This was the fourth time in the last four quarters that Ezcorp has either beat or met analyst estimates.

Hurrican Ike

Ezcorp was able to deliver impressive results in spite of the negative effects of Hurricane Ike, which forced the company to close 154 stores and lose approximately 1,054 store days.

Full-Year Results

Ezcorp’s full-year earnings totaled $52.5 million, or $1.21 per share, a 38% increase from the previous year.

Expansion Plans

Ezcorp also said that it still plans on adding up to 35 new Ez Money stores in the US and up to 35 new stores located in Mexico.

Analyst Estimates

Analyst estimates have risen in response to the great fourth-quarter and full-year results. The current-year estimate is up to $1.45 per share from $1.33 7 days ago.

The next-year estimate stands at $1.70 per share, a 17% earnings growth projection.

The Chart

Shares of EZPW have been rallying since early October after bottoming out just below $11. Since then, this stock has advanced to a high-water mark of over $16.50 and is currently pressuring a short-term level of resistance. Take a look at the chart below.

Content Courtesy: Zacks Investment Research

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