Credit Corp Group Limited (CCP) AI Stock Analysis

• Market Cap: €895.08M
• Dividend Yield: 4.5%
• Average Volume (3M): 198.61K
• Price to Earnings (P/E): 8.3
• Beta (1Y): 1.96
• Revenue Growth: 6.70%
• EPS Growth: 126.16%
• Country: AU
• Employees: 2,231
• Sector: Financial
• Sector Strength: 86
• Industry: Financial - Credit Services
• EPS (TTM): 0.64
• Shares Outstanding: 68,066,860
• 10 Day Avg. Volume: 184,665
• 30 Day Avg. Volume: 198,606
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €19.70
• Price Target Upside: 41.23% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Credit Corp Group Limited's stock score reflects significant challenges in financial performance, particularly with declining profitability and negative cash flows. These issues weigh heavily on the overall score. Despite this, the company's valuation appears attractive with a low P/E ratio and a high dividend yield, offering potential value for investors seeking income. However, the technical analysis suggests hesitation in the market, indicating uncertainty about the stock's short-term direction.

Positive Factors

Consumer Lending

Consumer Lending is another growth engine, with the potential for the auto lending product and digital credit card to significantly contribute to gross earnings.

Growth Potential

The US PDL business is seen as a major growth engine, with plans to expand purchases from A$150m to A$400m, indicating a strong growth potential.

Negative Factors

Earnings Expectations

The results for the 6 months to December were below expectations at the NPAT level, with a lower contribution from the PDL business.

Financial Performance

The market reacted negatively to the release of the h1 numbers, with the share price dropping by 10%, due to the run-up in price ahead of the release and numbers falling short of expectations.

Credit Corp Group Limited Business Overview & Revenue Model

Company Description

Credit Corp Group Limited (CCP) is a leading financial services provider based in Australia, specializing in debt purchasing and consumer lending. It operates in sectors such as debt purchasing, debt collection, and consumer finance, offering a range of services including debt recovery solutions and personal loans. The company serves a diverse clientele, including banks, finance companies, and utilities, with a focus on acquiring and managing non-performing loans.

How the Company Makes Money

Credit Corp Group Limited makes money primarily through two key revenue streams: debt purchasing and consumer lending. In the debt purchasing segment, the company acquires non-performing loan portfolios from financial institutions at a discount and then collects the outstanding amounts from debtors, profiting from the difference between the purchase price and the collected amount. In its consumer lending segment, Credit Corp issues personal loans to consumers, generating revenue through interest and fees charged on these loans. The company's earnings are supported by strategic partnerships with major financial institutions that sell their non-performing loans and by maintaining a robust collections infrastructure to optimize recovery rates. Additionally, Credit Corp's geographic expansion and diversification into markets such as the United States contribute to its revenue growth.

Credit Corp Group Limited Financial Statement Overview

Summary

Credit Corp Group Limited faces challenges with declining revenue and profitability, coupled with negative cash flows, indicating operational difficulties. Despite a stable equity position, increased leverage and reduced shareholder returns are concerning. Strategic measures may be needed to improve cash generation and operational efficiency.

Income Statement

The company experienced a significant drop in revenue from 2023 to 2024, with a revenue growth rate of -15.54%. Gross profit margin is strong at 108.86%, indicating efficient cost management. However, net profit margin decreased substantially to 12.69%, reflecting reduced profitability. Both EBIT and EBITDA margins have decreased, showing declining operational efficiency.

Balance Sheet

The company maintains a stable equity position with an equity ratio of 62.34%. The debt-to-equity ratio increased to 0.50, indicating higher leverage but still within a reasonable range. ROE decreased to 6.14%, suggesting reduced returns for shareholders compared to previous years.

Cash Flow

There is a concerning reversal in cash flows, with both operating and free cash flows turning negative in 2024, reflecting cash management issues. The operating cash flow to net income ratio is negative, indicating poor cash conversion from earnings.

Breakdown
Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
399.71M	473.37M	411.20M	345.86M	381.98M
	Gross Profit
399.71M	414.74M	364.87M	299.39M	337.52M
	EBIT
144.22M	190.07M	175.49M	135.81M	159.71M
	EBITDA
108.52M	201.23M	186.00M	146.65M	170.61M
	Net Income Common Stockholders
50.71M	91.25M	100.72M	88.13M	15.45M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
34.85M	58.82M	23.70M	55.68M	48.66M
	Total Assets
1.32B	1.25B	974.61M	781.25M	722.65M
	Total Debt
411.90M	341.69M	157.96M	28.28M	52.06M
	Net Debt
377.05M	282.87M	134.26M	-27.39M	3.40M
	Total Liabilities
498.66M	431.37M	233.97M	114.19M	128.44M
	Stockholders Equity
825.67M	817.42M	740.64M	667.06M	594.21M
Cash Flow		Free Cash Flow
-50.05M	62.25M	-14.05M	89.00M	124.38M
	Operating Cash Flow
-48.58M	63.58M	-10.23M	91.79M	127.53M
	Investing Cash Flow
-1.47M	-164.36M	-93.89M	-26.84M	-82.74M
	Financing Cash Flow
20.02M	136.65M	71.54M	-52.07M	-18.84M

Credit Corp Group Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 13.95
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:CCP, the sentiment is Positive. The current price of 13.95 is above the 20-day moving average (MA) of 12.77, above the 50-day MA of 13.64, and below the 200-day MA of 15.38, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 59.85 is Neutral, neither overbought nor oversold. The STOCH value of 66.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:CCP.

Credit Corp Group Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SUN	70 Outperform	$22.04B	15.44	9.52%	4.39%	-11.75%	―
Sector *	64 Neutral	$12.54B	9.79	7.92%	16985.69%	12.58%	-6.07%
CCP	63 Neutral	€895.08M	8.30	13.05%	4.50%	6.70%	126.16%
PPT	55 Neutral	€1.87B	―	-24.47%	7.68%	5.36%	-846.00%

Credit Corp Group Limited Corporate Events

Credit Corp Group Targets Growth in FY25 with Strategic Market Focus

Credit Corp Group Limited has released its FY25 market update, highlighting its strategic focus on leveraging large market opportunities in US debt buying and maintaining strong operational capabilities in Australian and New Zealand lending and debt buying. The company aims for long-term growth with a target return on equity of 16% to 18%, supported by low gearing and efficient cost management. The update underscores Credit Corp’s commitment to responsible lending and market disruption through lower pricing, positioning itself as a leader in the credit-impaired consumer segment.