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Regional Management (RM)
NYSE:RM
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Regional Management
(NYSE:RM)
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Rating:63Neutral
Price Target:
$37.00
▼(-5.42% Downside)
Action:ReiteratedDate:02/21/26
RM scores as a mid-range opportunity: attractive valuation (low P/E and solid yield) and positive earnings-call guidance/operating momentum support the outlook, but this is tempered by high and rising leverage (key financial risk) and weak current technical momentum with the stock trading below major moving averages.
Positive Factors
Free Cash Flow Generation
RM consistently converts earnings into free cash flow (~$304M in 2025; FCF/net income ~0.95–0.98), indicating durable earnings quality and internal funding for growth, dividends, and buybacks. Strong cash conversion supports capital returns and buffers cyclical pressures over months.
Topline and Portfolio Growth
Sustained portfolio expansion and originations (13% portfolio growth, $2.0B originations) reflect scalable demand in underbanked markets and successful distribution. Durable growth in receivables supports higher interest income and scale advantages across branches and digital channels over the medium term.
Improving Operating Efficiency
Material expense-ratio improvement to a record 12.4% reflects operating leverage from branch expansion, digital investments, and cost discipline. Sustained efficiency gains enhance return on assets and provide structural margin support even if yields or credit costs fluctuate.
Negative Factors
High and Rising Leverage
Debt growth to ~$1.73B and a debt/equity ratio near 4.65x materially increase financial leverage for a credit lender. Elevated leverage raises refinancing, covenant and earnings volatility risks, reducing flexibility to absorb credit losses or fund expansion without raising capital.
Credit‑Cycle Sensitivity
Serving near‑prime/subprime borrowers leaves RM exposed to income seasonality and behavioral shifts; management forecasts a +150bp Q1 NCL swing tied to tax refunds. Such volatility can compress margins and require higher provisioning, affecting sustainable earnings during stress periods.
Execution Risk on Expansion & Partnerships
Aggressive branch growth, new-state entry, and a developing bank partnership offer upside but entail hiring, credit, fraud and timing risks. Execution missteps could raise costs, impair credit quality, or delay scale benefits, making projected growth and efficiency outcomes less certain.
Regional Management (RM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$340.63M
Dividend Yield2.99%
Average Volume (3M)57.85K
Price to Earnings (P/E)7.9
Beta (1Y)1.04
Revenue Growth9.63%
EPS Growth77.14%
CountryUS
Employees2,131
SectorFinancial
Sector Strength70
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)1.30
Shares Outstanding9,712,805
10 Day Avg. Volume72,226
30 Day Avg. Volume57,847
Financial Highlights & Ratios
PEG Ratio1.06
Price to Book (P/B)1.03
Price to Sales (P/S)0.60
P/FCF Ratio1.26
Enterprise Value/Market Cap5.79
Enterprise Value/Revenue3.05
Enterprise Value/Gross Profit5.84
Enterprise Value/Ebitda21.42
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Regional Management Business Overview & Revenue Model
Company DescriptionRegional Management (RM) is a financial services company that specializes in providing a range of consumer finance solutions. Operating primarily in the southeastern and southwestern United States, RM offers personal loans, retail installment contracts, and other credit-related products to individuals who may have limited access to traditional banking services. The company serves both the near-prime and subprime markets, focusing on delivering accessible and flexible financial options to its customers.
How the Company Makes MoneyRegional Management generates revenue primarily through the interest and fees associated with the loans it provides to consumers. The company earns interest income from personal loans and retail installment contracts, which typically have higher interest rates than traditional bank loans due to the risk associated with lending to near-prime and subprime borrowers. Additionally, RM collects late fees and other ancillary charges, contributing to its revenue. Significant partnerships with retail establishments allow RM to offer point-of-sale financing, creating additional revenue streams through retail loan agreements. The company's strategic focus on expanding its branch network and enhancing its online lending capabilities also plays a critical role in driving growth and profitability.
Regional Management Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call conveyed materially positive operating momentum: record revenue, double-digit portfolio and origination growth, marked improvement in expense efficiency, strong capital generation and shareholder returns, and improved credit metrics. Management acknowledged near-term headwinds from Q1 seasonality and an expected rise in net credit losses tied to tax-refund-driven behavior and portfolio mix, and noted execution risks around expansion and a developing bank partnership. On balance, the company emphasized disciplined growth, constructive guidance for 2026 (ENR +10%, net income +20%–25%), and confidence in long-term risk-adjusted returns.Q4-2025 Updates
Positive Updates
Strong Quarter and EPS Beat
Q4 net income of $12.9 million and diluted EPS of $1.30, a 33% increase year-over-year, exceeding guidance despite a larger provision for credit losses tied to portfolio growth.
Record Revenue and Full-Year Improvement
Q4 total revenue reached a record $170 million, up 10% year-over-year; full-year net income was $44.4 million, an 8% increase versus 2024 and toward the upper end of prior guidance.
Portfolio and Originations Growth
Ending net receivables grew $248 million (13% year-over-year) to a $2.1 billion loan portfolio. Q4 net receivables increased $87 million and Q4 originations were $537 million (up 13% YoY); full-year originations totaled $2.0 billion, up 19% from 2024.
Auto-Secured Portfolio Expansion
Auto secured portfolio grew 42% year-over-year in 2025 and is highlighted as an attractive, higher-return segment the company will continue to invest in.
Improving Credit Metrics
30+ day delinquency improved 20 basis points year-over-year to 7.5% as of quarter-end. Adjusted Q4 annualized net credit loss (NCL) rate improved 30 bps YoY; full-year NCL rate improved 70 bps YoY (adjusted for prior-year items).
Allowance and Provisioning Support Growth
Allowance for credit losses rate held steady at 10.3%, a 20 bps improvement YoY, with management increasing the allowance by $8.9 million in Q4 to support portfolio growth.
Operating Efficiency and Expense Discipline
Annualized operating expense ratio hit an all-time best of 12.4% in Q4 (improvement of 160 bps YoY); full-year operating expense ratio was 13.1%, a 70 bps improvement YoY, reflecting scale benefits.
Capital Generation and Shareholder Returns
Generated $74 million of capital in 2025 and returned $36 million to shareholders via dividends and buybacks. Declared 30¢ dividend for Q1; repurchased ~197,000 shares in Q4 (weighted avg price $38.07) and ~702,000 shares for the full year (avg $34.12).
Branch Expansion and Physical Footprint Growth
Opened five new branches in Q4 (California and Louisiana) and 17 de novo branches over the past 12 months; average ending net receivables per branch reached $6.1 million.
Positive 2026 Guidance
2026 guidance calls for at least 10% ending net receivables growth and net income growth of 20%–25%, with continued focus on credit performance, operating leverage, and investments in data/technology.
Negative Updates
Near-Term Seasonality and Tax-Refund Headwinds
Management expects typical Q1 seasonality exacerbated by larger tax refunds (OBBA), likely causing sequential contraction in ending net receivables (potentially larger than normal) and softer origination demand in Q1.
Anticipated Short-Term Net Credit Loss Increase
Company expects a sequential increase in net credit losses in Q1 of roughly 150 basis points due to later-stage delinquency seasonality and denominator/behavioral effects tied to elevated tax refunds.
Yield Compression and Revenue Mix Effects
Total revenue yield and interest & fee yield declined sequentially by ~60 bps and ~40 bps, respectively (Q4 yields at 32.5% and 29.3%), with expectation of further sequential yield decline in Q1 from interest accrual reversals and runoff of smaller higher-yield loans.
Higher Provisioning and Allowance Build
Management recorded a larger provision for credit losses in Q4 driven by stronger portfolio growth and increased the allowance by $8.9 million, which, while prudent, can dampen near-term reported earnings.
Execution Risks with Expansion and New Initiatives
Planned expansion (branch growth, new-state entry) and the bank partnership capability remain execution items with risks including local talent, fraud, credit risk, timing uncertainty, and no detailed rollout timeline yet.
Short-Term Pressure on Yields from Customer Paydowns
Expected consumer use of larger tax refunds to pay down debt may reduce balances and high-yield smaller loans (driving yield and revenue pressure) before longer-term demand resumes.
Company Guidance
Management guided full‑year 2026 to ending net receivables growth of at least 10% and net income growth of 20–25% year‑over‑year, while noting typical Q1 seasonality that should drive a sequential net credit loss increase of roughly 150 basis points and a possible sequential contraction in ending net receivables due to elevated tax refunds; longer term they target a portfolio NPL tolerance under 10%. Management pointed to strong 2025 results underpinning the outlook: Q4 net income was $12.9M ($1.30 diluted EPS, +33% YoY) and full‑year net income was $44.4M (+8% YoY), ending net receivables rose $248M (13% YoY) to a $2.1B loan portfolio, Q4 originations were $537M (+13% YoY) and full‑year originations $2.0B (+19% YoY), Q4 total revenue was a record $170M (+10% YoY) with total revenue yield at 32.5% and interest & fee yield at 29.3%, and Q4 interest expense was $22.6M (4.3% of average net receivables annualized). Credit and efficiency metrics the company highlighted include a 30+ day delinquency rate of 7.5% (improved 20 bps YoY), a Q4 annualized net credit loss rate improved 30 bps YoY (full‑year improvement 70 bps), an allowance for credit losses rate of 10.3% (up 20 bps YoY with a $8.9M quarter increase), an all‑time best annualized operating expense ratio of 12.4% in Q4 (13.1% for the year, down 70 bps YoY), capital generation of $74M in 2025 with $36M returned to shareholders, a Q1 dividend of $0.30 per share, and share repurchases of ~197k shares in Q4 (702k shares for the year).Regional Management Financial Statement Overview
Summary
Improving earnings and strong free-cash-flow conversion support fundamentals, but the balance sheet is a major constraint: leverage is high and rising (debt-to-equity ~4.65x in 2025), increasing sensitivity to credit-cycle downturns. Profitability has recovered from 2023 lows, yet remains below 2021 peak levels.Income Statement
Revenue has grown steadily over 2020–2025 (2025 revenue up ~2% vs. 2024; stronger growth earlier), showing a durable topline. Profitability, however, has been volatile: net margin fell sharply from 2021’s peak (~21%) to low single-digits in 2023 (~3%), then recovered to ~7% in 2024–2025. Operating profitability also improved meaningfully from 2023 to 2025 (EBIT margin ~3.8% to ~12.4%), but remains well below 2021 levels—suggesting a business that can earn well in good periods but is sensitive to credit/operating conditions.62
Positive
Balance Sheet
Leverage is high and has trended upward: total debt rose from ~$0.79B (2020) to ~$1.73B (2025), and debt relative to equity remains elevated (~4.65x in 2025). Equity has grown more slowly than debt, keeping the balance sheet more risk-exposed for a credit-focused business. Returns on equity have recovered from 2023 (~5%) to 2024–2025 (~11–12%), but they are still well below the 2021 peak (~31%), indicating improved performance but a continued need to manage leverage and credit quality carefully.38
Negative
Cash Flow
Cash generation appears strong and consistently converts well into free cash flow: free cash flow is high each year (e.g., ~$304M in 2025) and closely tracks net income (free cash flow to net income ~0.95–0.98 across years), indicating solid earnings quality. Operating cash flow also strengthened over time (from ~$173M in 2020 to ~$309M in 2025) with solid free-cash-flow growth in 2025 (~9%). A watch item is variability in the provided operating cash flow coverage figure (notably low in 2024 vs. very high in 2025), implying some year-to-year swings in cash dynamics.78
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 645.57M | 588.50M | 551.40M | 507.19M | 428.35M |
| Gross Profit | 337.93M | 301.77M | 263.90M | 287.85M | 307.99M |
| EBITDA | 92.08M | 68.14M | 35.42M | 78.01M | 124.13M |
| Net Income | 44.41M | 41.23M | 15.96M | 51.22M | 88.69M |
Balance Sheet | |||||
| Total Assets | 2.10B | 1.91B | 1.79B | 1.72B | 1.46B |
| Cash, Cash Equivalents and Short-Term Investments | 98.00M | 3.95M | 4.51M | 3.87M | 10.51M |
| Total Debt | 1.73B | 1.51B | 1.43B | 1.38B | 1.13B |
| Total Liabilities | 1.73B | 1.55B | 1.47B | 1.42B | 1.18B |
| Stockholders Equity | 373.09M | 357.08M | 322.27M | 308.63M | 282.74M |
Cash Flow | |||||
| Free Cash Flow | 304.31M | 263.87M | 237.10M | 212.92M | 182.15M |
| Operating Cash Flow | 309.07M | 268.93M | 249.17M | 224.33M | 189.01M |
| Investing Cash Flow | -471.18M | -315.37M | -278.72M | -447.29M | -355.06M |
| Financing Cash Flow | 124.47M | 53.41M | 26.43M | 205.57M | 243.36M |
Regional Management Technical Analysis
Negative
39.12
Price Trends
37.74
Negative
37.99
Negative
35.73
Negative
Market Momentum
-0.90
Positive
41.77
Neutral
38.92
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RM, the sentiment is Negative. The current price of 39.12 is above the 20-day moving average (MA) of 35.95, above the 50-day MA of 37.74, and above the 200-day MA of 35.73, indicating a bearish trend. The MACD of -0.90 indicates Positive momentum. The RSI at 41.77 is Neutral, neither overbought nor oversold. The STOCH value of 38.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RM.
Regional Management Risk Analysis
Regional Management disclosed 54 risk factors in its most recent earnings report. Regional Management 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
Regional Management Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $247.23M | 5.97 | 10.79% | 4.44% | 15.52% | 2.05% | |
73 Outperform | $325.75M | 1.89 | 12.53% | 10.37% | 10.48% | -30.67% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | $230.79M | 7.76 | 8.59% | ― | -5.29% | ― | |
63 Neutral | $340.63M | 7.88 | 11.43% | 2.99% | 9.63% | 77.14% | |
61 Neutral | $305.33M | 5.72 | 11.02% | 15.96% | 6.38% | 41.48% | |
51 Neutral | $447.51M | -1.30 | -31.97% | ― | 13.89% | -899.50% |
* Financial Sector Average
RM
Regional Management
34.60
2.61
8.16%
MFIN
Medallion Financial
10.39
2.75
35.91%
PRAA
Pra Group
10.78
-11.13
-50.80%
YRD
Yiren Digital
3.83
-2.51
-39.59%
OPRT
Oportun Financial
5.20
-2.31
-30.76%
RWAY
Runway Growth Finance Corp
8.25
-2.12
-20.44%
Regional Management Corporate Events
Business Operations and Strategy
Regional Management Highlights Digital Growth and Expansion Strategy
Positive
Feb 20, 2026
Regional Management Corp., operating as Regional Finance, is a diversified consumer finance provider serving primarily underbanked and non-prime customers through 353 branches in 19 states and digital channels, with $2.1 billion in receivables as of December 31, 2025. The NYSE-listed lender targets borrowers with limited access to traditional credit and seeks to grow its portfolio responsibly using centralized originations, modern infrastructure, and omni-channel distribution.
In a February 2026 investor presentation tied to the SFVegas 2026 conference, management highlighted its expansion into new states since 2021, a roughly $99 billion addressable personal installment loan market, and its roughly 2% market share, underscoring significant growth runway. The company pointed to state expansion, product development, and digital initiatives as drivers of profitable portfolio growth and efficiency, while emphasizing high customer satisfaction metrics and increasing use of AI and data analytics to support stable credit quality and capital-efficient growth.
Regional Management also framed its omni-channel and digital capabilities as key levers for operating leverage and potential strategic partnerships at national scale. For stakeholders, the message reinforced a focus on responsible growth, balance-sheet strength supporting capital returns, and the use of advanced credit tools and technology to navigate credit cycles and competitive pressures in the non-prime consumer lending market.
The most recent analyst rating on (RM) stock is a Hold with a $42.00 price target. To see the full list of analyst forecasts on Regional Management stock, see the RM Stock Forecast page.
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Regional Management posts record Q4 revenue and dividend
Positive
Feb 4, 2026
On February 4, 2026, Regional Management reported fourth-quarter 2025 net income of $12.9 million and record revenue of $169.7 million, fueled by 13.1% portfolio growth, a surge in auto-secured lending, and tight cost controls that delivered an all-time-low 12.4% operating expense ratio; the company also repurchased nearly 197,000 shares during the quarter and maintained ample liquidity with $511 million of unused revolver capacity. The board declared a $0.30 per-share quarterly dividend payable March 12, 2026 to shareholders of record February 19, reflecting confidence in the balance sheet after year-end net finance receivables reached $2.1 billion against $1.7 billion of debt with 84% fixed-rate funding.
The most recent analyst rating on (RM) stock is a Hold with a $42.00 price target. To see the full list of analyst forecasts on Regional Management stock, see the RM Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.