Consumer Portfolio Services (CPSS) AI Stock Analysis

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Consumer Portfolio Services

(NASDAQ:CPSS)

64Neutral

Consumer Portfolio Services exhibits a stable financial performance with strong revenue and cash flow figures. However, fluctuating profitability and increased debt levels pose risks. Technical indicators provide mixed signals, suggesting caution in the short term. Despite a fair valuation, challenges highlighted in the earnings call, such as increased expenses and higher delinquency rates, weigh on the overall score. The company's strategic advancements and positive revenue trends offer growth potential, but operational inefficiencies and financial challenges need addressing to enhance its market position.

Consumer Portfolio Services (CPSS) vs. S&P 500 (SPY)

Market Cap

$188.86M

Dividend YieldN/A

Average Volume (3M)16.80K

Price to Earnings (P/E)11.0

Beta (1Y)0.34

Revenue Growth9.56%

EPS Growth-58.56%

CountryUS

Employees943

SectorFinancial

Sector Strength84

IndustryFinancial - Credit Services

Share Statistics

EPS (TTM)0.19

Shares Outstanding21,559,795

10 Day Avg. Volume14,404

30 Day Avg. Volume16,798

Financial Highlights & Ratios

PEG Ratio-1.04

Price to Book (P/B)0.68

Price to Sales (P/S)0.00

P/FCF Ratio0.86

Enterprise Value/Market Cap17.58

Enterprise Value/Revenue2.58

Enterprise Value/Gross Profit10.10

Enterprise Value/Ebitda6.46

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Consumer Portfolio Services Business Overview & Revenue Model

Company DescriptionConsumer Portfolio Services, Inc. operates as a specialty finance company in the United States. It is involved in the purchase and service of retail automobile contracts originated by franchised automobile dealers and select independent dealers in the sale of new and used automobiles, light trucks, and passenger vans. The company, through its automobile contract purchases, offers indirect financing to the customers of dealers with limited credit histories or past credit problems. It serves as an alternative source of financing for dealers, facilitating sales to customers who are not able to obtain financing from commercial banks, credit unions, and the captive finance companies. The company also acquires installment purchase contracts in four merger and acquisition transactions; purchases immaterial amounts of vehicle purchase money loans from non-affiliated lenders. and offers financing directly to sub-prime consumers to facilitate their purchase of a new or used automobile, light truck, or passenger van. It services its automobile contracts through its branches in California, Nevada, Virginia, Florida, and Illinois. The company was founded in 1991 and is based in Las Vegas, Nevada.

How the Company Makes MoneyConsumer Portfolio Services generates revenue primarily through the acquisition and servicing of automobile loans. The company purchases loans from dealers at a discount, which allows them to earn interest income by charging interest rates on these loans that are higher than the rate at which they purchase them. Additionally, CPS earns servicing fees by managing the collection of payments and handling customer service for the loans they own or service. The company also benefits from securitization transactions, where pools of loans are sold to investors, thus providing liquidity and an additional revenue stream. Key factors contributing to CPS's earnings include the interest rate environment, credit performance of the loan portfolio, and the ability to maintain strong relationships with automobile dealers and financial markets.

Consumer Portfolio Services Financial Statement Overview

Summary

Overall, Consumer Portfolio Services exhibits commendable financial stability with strong operating cash flows and improved revenue figures. However, there are risks associated with fluctuating profitability margins and reliance on debt financing to support asset growth. Continued focus on enhancing net income and managing debt levels could strengthen the company’s financial position further.

Income Statement

Positive

The company has shown a mixed performance in terms of revenue growth, with a significant increase from 2023 to 2024, yet experiencing fluctuations in previous years. The gross profit margin remains strong, indicating effective cost management. However, the net profit margin has been volatile, showing a recent decrease due to rising expenses or other factors impacting net income. EBIT and EBITDA margins are moderate, reflecting steady operational efficiency but with room for improvement.

Balance Sheet

Neutral

The balance sheet reflects a strong equity base with a low debt-to-equity ratio, especially in 2024, which indicates reduced financial leverage and lower risk. However, the equity ratio has been modest, suggesting that a significant portion of assets is financed by debt. Return on equity has shown variability, highlighting challenges in achieving consistent profitability relative to equity.

Cash Flow

Positive

The cash flow statement demonstrates robust operating cash flow generation, supporting strong free cash flow figures. There is a positive trajectory in free cash flow growth, indicating efficient cash management and capacity to fund operations without reliance on external financing. The operating cash flow to net income ratio is solid, suggesting effective conversion of earnings into cash.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
393.51M	214.60M	242.19M	192.57M	169.82M
	Gross Profit
202.25M	208.23M	234.65M	184.86M	162.40M
	EBIT
27.43M	61.10M	1.62B	65.75M	20.12M
	EBITDA
0.00	0.00	0.00	0.00	0.00
	Net Income Common Stockholders
19.20M	45.34M	85.98M	47.52M	21.68M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
11.71M	6.17M	13.49M	29.93M	13.47M
	Total Assets
3.49B	2.90B	2.75B	2.16B	2.15B
	Total Debt
3.13B	2.57B	2.47B	1.95B	1.97B
	Net Debt
3.12B	2.56B	2.46B	1.92B	1.96B
	Total Liabilities
3.20B	2.63B	2.52B	1.99B	2.01B
	Stockholders Equity
292.77M	274.67M	228.39M	170.21M	133.36M
Cash Flow		Free Cash Flow
233.32M	237.42M	213.78M	196.22M	238.74M
	Operating Cash Flow
233.75M	237.98M	215.93M	198.19M	238.77M
	Investing Cash Flow
-769.71M	-359.53M	-713.90M	-115.36M	93.03M
	Financing Cash Flow
547.92M	84.19M	484.21M	-50.44M	-328.48M

Consumer Portfolio Services Technical Analysis

Technical Analysis Sentiment

Negative

Last Price8.79

Price Trends

50DMA

8.88

Negative

100DMA

9.89

Negative

200DMA

9.78

Negative

Market Momentum

MACD

0.03

Positive

RSI

46.47

Neutral

STOCH

9.22

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CPSS, the sentiment is Negative. The current price of 8.79 is below the 20-day moving average (MA) of 9.05, below the 50-day MA of 8.88, and below the 200-day MA of 9.78, indicating a bearish trend. The MACD of 0.03 indicates Positive momentum. The RSI at 46.47 is Neutral, neither overbought nor oversold. The STOCH value of 9.22 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CPSS.

Consumer Portfolio Services Risk Analysis

Consumer Portfolio Services disclosed 32 risk factors in its most recent earnings report. Consumer Portfolio Services reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Consumer Portfolio Services Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OFS	70 Outperform	$116.83M	3.88	19.56%	15.60%	-49.04%	―
MRCC	69 Neutral	$138.23M	19.63	3.63%	15.67%	127.09%	2519.30%
CPSS	64 Neutral	$188.86M	11.04	6.69%	―	9.56%	-58.56%
Sector *	64 Neutral	$12.82B	9.87	7.67%	17000.34%	12.39%	-5.85%
ONIT	62 Neutral	$303.84M	13.89	5.50%	―	-3.14%	264.15%
OXSQ	51 Neutral	$174.15M	625.64	-0.32%	17.21%	-338.17%	-97.99%
MBI	28 Underperform	$230.70M	―	26.69%	―	583.33%	6.59%

* Financial Sector Average

Performance Comparison

CPSS

Consumer Portfolio Services

8.79

0.35

4.15%

MBI

MBIA

4.53

-1.33

-22.70%

ONIT

Onity Group

39.59

14.46

57.54%

OXSQ

Oxford Square Capital

2.42

-0.26

-9.70%

OFS

OFS Capital

8.71

0.18

2.11%

MRCC

Monroe Capital

6.47

-0.12

-1.82%

Consumer Portfolio Services Earnings Call Summary

Earnings Call Date:May 19, 2025

(Q1-2025)

% Change Since: 0.34%|

Next Earnings Date:Jul 29, 2025

Earnings Call Sentiment Positive

The earnings call reflected a strong start to the fiscal year with significant revenue and portfolio growth, improved delinquency and charge-off rates, and record shareholders' equity. However, challenges included flat earnings per share, increased interest expenses, and a decline in fair value markup. Despite these challenges, the company maintained a positive outlook, expecting further growth and improvement in credit performance.

Q1-2025 Updates

Positive Updates

Strong Revenue Growth

Revenues increased by 17% to $106.9 million compared to $91.7 million in the first quarter of 2024.

Increase in Portfolio Size

Finance receivables at fair value increased by 24% to $3.45 billion compared to $2.79 billion as of March 31, 2024.

Record Shareholders' Equity

Shareholders' equity reached a record high of $298.4 million, a 7% increase over the previous year.

Originations Growth

Originations grew by 31.5% year-over-year with $451 million in new contracts compared to $346 million in the first quarter of 2024.

Improved Delinquency and Charge-off Rates

Total delinquency declined slightly to 12.35% from 12.39% year-over-year, and annualized net charge-offs improved to 7.5% from 7.84%.

Negative Updates

Flat Earnings Per Share

Diluted earnings per share remained flat at $0.19 compared to the first quarter of 2024.

Increased Interest Expenses

Interest expenses increased significantly to $55 million from $42 million, driven by higher rates and debt balance.

Decline in Fair Value Markup

Fair value markup decreased to $3.5 million from $5 million in the first quarter of the previous year.

Stable but Low Return on Managed Assets

Return on managed assets slightly decreased to 0.8% from 0.9% year-over-year.

Company Guidance

During the Consumer Portfolio Services 2025 First Quarter Operating Results Conference Call, management provided optimistic guidance, highlighting a strong start to the fiscal year with originations exceeding $100 million. Revenues for the first quarter reached $106.9 million, marking a 17% increase from the previous year, driven by interest on a $3.6 billion fair value portfolio yielding 11.4%. Expenses also rose by 17% to $100.1 million, primarily due to a higher interest expense of $55 million. Despite these increases, pretax earnings grew by 3% to $6.8 million, and net income increased by 2% to $4.7 million, translating to a flat diluted earnings per share of $0.19. The company reported a 24% growth in finance receivables at fair value to $3.45 billion and a 20% increase in securitization debt to $2.74 billion. Shareholders' equity reached a record high of $298.4 million, up 7% year-over-year. The net interest margin improved by 4% to $52 million, while core operating expenses rose by 3% to $46.1 million, accounting for 5.2% of the managed portfolio, a reduction from 6% last year. The return on managed assets was slightly lower at 0.8% compared to 0.9% in 2024. The company also noted operational efficiencies, with a consistent employee base of approximately 950, and highlighted a robust credit profile with average APR at 20.32%, loan-to-value ratios at 117-118%, and an average payment of $535. Total delinquencies and charge-offs showed slight year-over-year improvements, with annualized net charge-offs at 7.5%. The company emphasized strategic growth through experienced sales hires and partnerships, maintaining a focus on credit quality and operational efficiency amid macroeconomic uncertainties.

Consumer Portfolio Services Corporate Events

Private Placements and FinancingBusiness Operations and Strategy

Consumer Portfolio Services Leads in Sub-Prime Auto Financing

Positive

Nov 8, 2024

Consumer Portfolio Services (CPS) is at the forefront of sub-prime automobile financing, offering indirect loans through licensed dealers to customers who might not qualify elsewhere. With a $3.5 billion managed portfolio and a presence in numerous states, CPS leverages advanced machine learning and AI models to assess credit risks, ensuring high-quality loans. The company boasts a seasoned leadership team and a solid track record of profitability, making it a notable player in the competitive, capital-intensive auto finance market.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.