Some good news for all subprime consumer lending enthusiasts, whether you follow $ELVT, $CURO, $ENVA, $OPFI, or any others.
$ELVT just put out a press release this afternoon that pretty much says business is absolutely booming right now
$ELVT just put out a press release this afternoon that pretty much says business is absolutely booming right now
Using midpoints of both ranges, the Company is revising guidance for the combined loans receivable by 15% for year end 2021. This is quite the boost and in my view, more or less removes the overhang of tepid credit demand
And given how conservative mgmt. has been, I really doubt that they are suddenly dropping all underwriting standards to attract more customers. It's so against their historical MO and investor guidance. I think macro is really turning for the better in terms of credit demand!
And this is awesome because credit quality is still damn strong, as evidenced by latest quarterly earnings. I'm sure things will normalize to historical levels at some point, but I doubt that happens overnight
So this means that strong EBITDA and FCF generation from these new loans is not too far away... and guess what they might do with that cash? Probably more buybacks, or even potential for a tender or a special dividend at some point in the future
But it's not that simple - they need to resolve the Thinkfinance lawsuit first, which appears to be a nuisance that should go away when they settle for a modest amount (purely my own speculation! there is some risk here, for full disclosure)
I plan to add to my position in the coming days if the share price does not significantly appreciate from current levels. The stock is already absurdly cheap (without this update) and the update tips the balance significantly imo
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