WRLDWRLD
US • —
$223.83
P/E
32.63
PEG
—
FCF Yield
—
Rev Growth YoY
+3.6% YoY
Gross Margin
92.2%
Health Score
3/10
D/E Ratio
1.67
Confidence
MEDIUM
Business Snapshot
World Acceptance Corporation operates as a consumer finance company, providing short-term, small-loan products to individuals with limited access to traditional credit sources. The company generates its primary revenue through interest and fees on installment loans and related financial services in its core markets. Operating in the subprime consumer lending space, World Acceptance is a regional player with a targeted customer base rather than a dominant industry leader. A defining characteristic of its business model is the high interest rate environment and regulatory risk inherent in the small-dollar lending segment, which heavily impacts its profitability and growth trajectory.
Financial Health
Gross margin stands at 92.2%, a very high figure typical of a lending business where the cost of loan funding is relatively low, but net margin is only 5.9%, highlighting the significant operating and provisioning costs of the subprime lending model. The balance sheet is stretched, with a Debt/Equity ratio of 1.67x indicating substantial leverage and a Current Ratio of just 0.05x, which suggests severe short-term liquidity risk where current assets cover virtually none of current liabilities...
Risk Assessment
- VALUATION — P/E of 32.63x is elevated versus the sector average of 22x, implying a premium for a company with negative earnings growth.
- EARNINGS QUALITY — The company has beaten earnings estimates in 0 of the last 4 quarters, indicating persistent guidance overoptimism and execution risk.
- DEBT / LIQUIDITY — The current ratio of 0.05x suggests the company has virtually no ability to cover short-term obligations with current assets, a sign of distress.
- TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed.
- FCF / CASH BURN — Free cash flow is not available, preventing a cash flow profitability assessment, which is a critical risk for a highly leveraged lender....
Gross margin stands at 92.2%, a very high figure typical of a lending business where the cost of loan funding is relatively low, but net margin is only 5.9%, highlighting the significant operating and provisioning costs of the subprime lending model. The balance sheet is stretched, with a Debt/Equity ratio of 1.67x indicating substantial leverage and a Current Ratio of just 0.05x, which suggests severe short-term liquidity risk where current assets cover virtually none of current liabilities. Free cash flow data is not available, making it impossible to assess whether the company is generating the cash needed to service its debt or reinvest in the business. The overall financial health is weak, characterised by high leverage, extremely poor liquidity, and thin profitability, which would constrain dividend capacity and raise the risk of needing additional financing.
- VALUATION — P/E of 32.63x is elevated versus the sector average of 22x, implying a premium for a company with negative earnings growth. - EARNINGS QUALITY — The company has beaten earnings estimates in 0 of the last 4 quarters, indicating persistent guidance overoptimism and execution risk. - DEBT / LIQUIDITY — The current ratio of 0.05x suggests the company has virtually no ability to cover short-term obligations with current assets, a sign of distress. - TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed. - FCF / CASH BURN — Free cash flow is not available, preventing a cash flow profitability assessment, which is a critical risk for a highly leveraged lender.
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