Cash Converters International Limited (CCV) AI Stock Analysis

• Market Cap: €222.78M
• Dividend Yield: 5.63%
• Average Volume (3M): 898.85K
• Price to Earnings (P/E): 11.3
• Beta (1Y): 0.60
• Revenue Growth: 8.52%
• EPS Growth: 6.10%
• Country: AU
• Employees: 1,765
• Sector: Consumer Cyclical
• Sector Strength: 66
• Industry: Specialty Retail
• EPS (TTM): 0.02
• Shares Outstanding: 627,545,040
• 10 Day Avg. Volume: 463,343
• 30 Day Avg. Volume: 898,846
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 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: €0.51
• Price Target Upside: 40.36% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 78 Outperform
• Price Target: AU$0.50 ▲(38.89% Upside)

Cash Converters International Limited shows a promising outlook with strong financial performance, attractive valuation, and positive technical indicators. Despite the high leverage and indications of overbought conditions in the stock, the overall prospects remain positive, driven by strong fundamentals and valuation metrics.

Cash Converters International Limited Business Overview & Revenue Model

Company Description

Cash Converters International Limited operates as a franchisor of second-hand goods and financial services stores under the Cash Converters brand name. It operates through Franchise Operations, Store Operations, Personal Finance, and Vehicle Financing segments. The Franchise Operations segment engages in the sale of franchises for the retail sale of new and second-hand goods, as well as sale of master licenses for the development of franchises worldwide. The Store Operations segment is involved in the retail sale of new and second-hand goods, as well as in cash advance and pawnbroking operations through corporate owned stores in Australia. The Personal Finance segment provides personal loans; and Mon-E, which provides administration services for the Cash Converters network in Australia to offer small cash advance loans to customers. The Vehicle Financing segment provides motor vehicle financing services. The company operates 155 stores in Australia and 548 stores internationally. Cash Converters International Limited was founded in 1984 and is based in Perth, Australia.

How the Company Makes Money

Cash Converters International Limited generates revenue through a diversified business model that includes both retail and financial services. The company earns money primarily through the sale of second-hand goods in its stores, where it acquires inventory from customers who sell or pawn items. It also generates significant income from financial services, including interest and fees from personal loans and pawnbroking services. The interest on personal loans and the sale of forfeited pawned items constitute key revenue streams. Additionally, the company benefits from franchise operations, collecting fees and royalties from franchisees. Key factors contributing to its earnings include the demand for affordable goods and short-term credit, as well as strategic partnerships and a robust network of retail locations worldwide.

Cash Converters International Limited Financial Statement Overview

Summary

Cash Converters International Limited demonstrates a solid recovery with strong revenue and profit growth, effective operational performance, and improved cash flow. However, the company faces challenges with high leverage and historical cash flow volatility.

Income Statement

Cash Converters International Limited has shown a robust improvement in revenue with a notable growth from $300.95M in 2023 to $377.14M in 2024, indicating a significant revenue growth rate of approximately 25.3%. The Gross Profit Margin is strong at 24.5%, and the company achieved a positive Net Profit Margin of 4.6%, a turnaround from a negative margin in 2023. EBIT and EBITDA margins are healthy at 14.3% and 15.9%, respectively, showcasing operational efficiency. However, past volatility in net income reflects underlying risks.

Balance Sheet

The company's Debt-to-Equity Ratio stands at 1.02, which is relatively high and indicates significant leverage, posing potential risk. Return on Equity is modest at 8.2%, reflecting moderate profitability on shareholder investment. The Equity Ratio is at 44.2%, indicating a balanced capital structure but also highlighting exposure to liabilities. Overall, the balance sheet shows stability but with caution due to leverage.

Cash Flow

The Free Cash Flow has turned positive to $31.99M in 2024 from negative in 2023, reflecting significant improvement in liquidity. The Operating Cash Flow to Net Income Ratio of 2.21 suggests strong cash generation relative to profits. Free Cash Flow to Net Income Ratio is 1.84, indicating efficient conversion of profits into cash. However, past fluctuations in operating cash flow highlight potential volatility.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	377.14M	262.02M	212.21M	200.32M	276.05M
Gross Profit	92.27M	79.17M	69.80M	125.74M	75.40M
EBITDA	59.82M	-67.85M	35.97M	40.45M	16.50M
Net Income	17.40M	-97.16M	11.18M	16.20M	-10.49M
Balance Sheet
Total Assets	478.04M	445.54M	478.19M	477.66M	479.83M
Cash, Cash Equivalents and Short-Term Investments	56.29M	71.56M	58.09M	72.17M	106.55M
Total Debt	215.07M	200.73M	133.18M	133.76M	140.84M
Total Liabilities	266.67M	239.04M	162.84M	159.75M	173.46M
Stockholders Equity	211.37M	206.49M	315.35M	317.90M	306.37M
Cash Flow
Free Cash Flow	31.99M	-16.01M	6.01M	-1.91M	65.94M
Operating Cash Flow	38.45M	-11.54M	7.91M	1.69M	70.11M
Investing Cash Flow	-33.06M	-22.63M	1.89M	-6.45M	-1.78M
Financing Cash Flow	-20.67M	47.01M	-23.42M	-29.77M	-43.56M

Cash Converters International Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.36
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:CCV, the sentiment is Positive. The current price of 0.36 is above the 20-day moving average (MA) of 0.34, above the 50-day MA of 0.32, and above the 200-day MA of 0.26, indicating a bullish trend. The MACD of 0.01 indicates Positive momentum. The RSI at 61.78 is Neutral, neither overbought nor oversold. The STOCH value of 51.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:CCV.

Cash Converters International Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CCV	78 Outperform	€222.78M	11.34	9.12%	5.63%	8.52%	6.10%
JYC	75 Outperform	AU$146.66M	20.39	21.62%	5.49%	-2.09%	-24.35%
DSK	70 Outperform	AU$58.53M	10.16	13.17%	6.64%	5.42%	-8.87%
ABY	68 Neutral	AU$77.05M	42.75	4.65%	―	5.51%	244.64%
Sector *	61 Neutral	$17.16B	12.39	-5.32%	3.05%	1.51%	-15.30%
BBN	56 Neutral	AU$322.46M	34.37	8.94%	1.03%	4.72%	465.60%

Cash Converters International Limited Corporate Events

Cash Converters Expands UK Presence with Lloyds Bank Funding

Cash Converters International Limited has secured a £12 million finance facility from Lloyds Bank to support its strategic objective of acquiring franchise stores. The company has agreed to acquire 10 franchise stores in the UK for approximately £7.5 million, marking the first purchase funded by the new facility. This acquisition will increase the number of corporate stores in the UK to 58, enhancing the company’s earnings and strengthening its market position in the UK and Europe.

Cash Converters Updates Securities Trading Policy

Cash Converters International Limited has announced a revised Securities Trading Policy, which has been lodged with the ASX in compliance with ASX Listing Rule 12.10. This update reflects the company’s ongoing commitment to corporate governance and transparency, potentially impacting its operations and stakeholder relations positively.

Cash Converters Reinvents with Strategic Acquisitions and Digital Focus

Cash Converters International Limited has announced its strategic shift towards acquiring franchise stores and pivoting away from small and vehicle loans. This move is part of their ongoing transformation into a global, data-driven retailer and non-bank lender, with a focus on expanding their luxury inventory and enhancing their credit models using machine learning. The company’s recent acquisitions in New Zealand and the UK, along with the introduction of a lower-cost line of credit loans, highlight their commitment to reaching millions of customers worldwide.