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World Acceptance Corp (WRLD)
NASDAQ:WRLD

World Acceptance (WRLD) AI Stock Analysis

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World Acceptance

(NASDAQ:WRLD)

Rating:78Outperform
Price Target:
World Acceptance exhibits strong financial health with excellent profitability and cash flow, backed by a solid balance sheet. The stock is in a positive technical trend but caution is advised due to overbought signals. Valuation metrics suggest it is undervalued, enhancing its attractiveness. Strategic initiatives discussed in the earnings call, like customer base growth and credit card pilots, indicate a proactive approach to overcoming challenges, resulting in a promising albeit moderately risky investment opportunity.

World Acceptance (WRLD) vs. SPDR S&P 500 ETF (SPY)

World Acceptance Business Overview & Revenue Model

Company DescriptionWorld Acceptance Corporation (WRLD) is a financial services company that primarily operates in the small-loan consumer finance sector. The company is involved in offering short-term and medium-term consumer installment loans, related credit insurance, and ancillary products and services to individuals. Headquartered in Greenville, South Carolina, World Acceptance serves customers through a network of branch offices located across various states in the United States and Mexico.
How the Company Makes MoneyWorld Acceptance Corporation generates revenue primarily through the issuance of small consumer installment loans. These loans are typically offered to individuals who may not have access to traditional banking services or who require immediate financial assistance. The company earns money through the interest charged on these loans, as well as fees related to loan origination and servicing. Additionally, World Acceptance offers credit insurance and ancillary products, which contribute to its revenue streams. The company’s earnings are influenced by factors such as interest rates, credit risk management, and regulatory changes in the consumer finance industry.

World Acceptance Financial Statement Overview

Summary
World Acceptance presents a strong financial profile with excellent profitability and cash flow generation. The company's recent elimination of debt strengthens its balance sheet, though historical leverage could be a concern if debt levels rise again. Revenue volatility needs addressing to ensure sustained growth.
Income Statement
78
Positive
World Acceptance shows strong profitability with an impressive gross profit margin and EBIT margin for TTM (Trailing-Twelve-Months), reflecting efficient cost management. However, revenue growth has been inconsistent, with a significant decline in the last annual period, which might raise concerns about future top-line expansion.
Balance Sheet
85
Very Positive
The company maintains a robust balance sheet with no total debt in the TTM period, contributing to a solid equity position. The equity ratio is healthy, indicating financial stability. However, past periods show high leverage, which could pose risks if debt levels increase again.
Cash Flow
82
Very Positive
World Acceptance demonstrates strong cash flow performance, with substantial free cash flow relative to net income in the TTM period. The operating cash flow to net income ratio is excellent, indicating efficient cash generation. However, investment cash flows are significantly negative, which could impact future liquidity.
Breakdown
Mar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income StatementTotal Revenue
564.84M524.98M616.56M585.65M530.84M
Gross Profit
395.63M368.01M357.09M399.44M444.60M
EBIT
158.50M151.65M77.61M105.67M111.40M
EBITDA
164.96M158.53M88.52M110.68M149.52M
Net Income Common Stockholders
89.74M77.35M21.23M53.92M88.28M
Balance SheetCash, Cash Equivalents and Short-Term Investments
9.73M11.84M16.51M19.24M15.75M
Total Assets
1.01B1.06B1.12B1.22B954.27M
Total Debt
525.56M577.95M679.00M779.85M496.73M
Net Debt
515.83M566.11M662.49M760.61M480.98M
Total Liabilities
568.15M631.92M732.09M845.27M549.34M
Stockholders Equity
439.48M424.43M385.23M373.02M404.93M
Cash FlowFree Cash Flow
0.00259.85M285.73M275.41M215.27M
Operating Cash Flow
0.00265.78M291.55M281.48M226.95M
Investing Cash Flow
0.00-135.14M-180.58M-460.92M-55.20M
Financing Cash Flow
0.00-135.32M-113.70M182.93M-140.23M

World Acceptance Technical Analysis

Technical Analysis Sentiment
Positive
Last Price143.45
Price Trends
50DMA
131.40
Positive
100DMA
131.02
Positive
200DMA
123.56
Positive
Market Momentum
MACD
4.45
Positive
RSI
55.92
Neutral
STOCH
39.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WRLD, the sentiment is Positive. The current price of 143.45 is above the 20-day moving average (MA) of 141.03, above the 50-day MA of 131.40, and above the 200-day MA of 123.56, indicating a bullish trend. The MACD of 4.45 indicates Positive momentum. The RSI at 55.92 is Neutral, neither overbought nor oversold. The STOCH value of 39.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WRLD.

World Acceptance Risk Analysis

World Acceptance disclosed 46 risk factors in its most recent earnings report. World Acceptance 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 3 New Risks
1.
Broad stock market fluctuations-driven by economic, geopolitical, or investor sentiment factors-may materially impact the trading price of the Company's common stock, regardless of Company performance. Q1, 2025
2.
Future issuance of additional common stock-whether for acquisitions, capital raises, or other purposes-may dilute existing shareholders and impact earnings per share. Q1, 2025
3.
The absence or reduction of dividend payments may decrease the Company's attractiveness to income-focused investors and impact shareholder sentiment. Q1, 2025

World Acceptance Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$732.11M9.3722.68%15.21%20.25%
78
Outperform
$851.97M8.7920.78%-1.46%
76
Outperform
$737.18M11.8110.84%8.14%14.79%
YRYRD
75
Outperform
$541.98M2.5017.96%6.05%17.03%-23.72%
RMRM
71
Outperform
$260.91M7.999.51%4.54%6.57%44.84%
64
Neutral
$12.66B9.797.67%17015.07%12.23%-6.06%
58
Neutral
$547.69M7.726.03%23.90%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
WRLD
World Acceptance
143.45
17.80
14.17%
EZPW
EZCORP
13.40
3.20
31.37%
PRAA
Pra Group
13.63
-8.11
-37.30%
RM
Regional Management
26.44
0.30
1.15%
ATLC
Atlanticus Holdings
47.42
21.94
86.11%
YRD
Yiren Digital
6.24
1.85
42.14%

World Acceptance Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q4-2025)
|
% Change Since: 4.48%|
Next Earnings Date:Jul 17, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted positive developments such as customer base growth, improved gross yields, and increased non-refinance loan volume. However, it also pointed out challenges like a decrease in the outstanding ledger and sticky delinquency rates. The company's efforts to shift towards smaller loans and the introduction of a credit card pilot suggest strategic initiatives to address these challenges.
Q4-2025 Updates
Positive Updates
Customer Base Growth
The company reported a 3.5% increase in its customer base, marking the first year of year-over-year customer growth since fiscal year 2022.
Improved Gross Yields
Gross yields improved by over 100 basis points this year, contributing to the company's financial health.
Non-Refinance Loan Volume Increase
Non-refinance loan volume increased by 12.6% year-over-year, maintaining high credit quality and low first payment default rates.
Successful Tax Return Season
The fourth quarter benefited from a 25% increase in tax return revenue, contributing nearly $7 million.
Launch of Credit Card Pilot
The company piloted its first World finance credit card internally, with plans for wider pilots and customer offerings later this fiscal year.
Negative Updates
Decrease in Outstanding Ledger
The company ended the year with a $1.22 billion outstanding ledger, a 4% decrease year-over-year.
Sticky Delinquency Rates
Delinquency rates appeared stubborn to return to normal levels, partly due to the growth in new customers with higher loss rates.
Reduction in Average Balance per Customer
The average balance per customer decreased by 7.3% year-over-year, following a 7.1% decrease the previous year.
Company Guidance
During the World Acceptance Corporation's Fourth Quarter 2025 Earnings Conference Call, several key metrics and guidance details were provided by CEO Chad Prashad. The company concluded the fiscal year with a $1.22 billion outstanding ledger, marking a 4% decrease year-over-year, while the customer base grew by 3.5%. The average balance per customer decreased by 7.3% as part of ongoing efforts to improve gross yields, which saw an increase of over 100 basis points. The annualized charge-off rate was noted at 17.5%, with an anticipated natural reduction of 125 to 150 basis points with normal portfolio growth. The newest customer bucket saw a 36% increase, impacting delinquency rates, though improvements were noted in early-stage delinquency buckets. A 25% increase in tax return revenue contributed nearly $7 million, and a $2.8 million after-tax accrual release boosted EPS by $0.38 to $8.13 for the quarter. Non-refinance loan volume rose 12.6% year-over-year, and refinance volume improved slightly by 3% despite a temporary demand dip in March. The portfolio's composition shifted towards small loans, with large loans reduced to 48%. Approval rates for new customers improved by around 50% in the latter quarters compared to fiscal 2024. The company also initiated a pilot for its new World finance credit card, aiming to align yield with risk and expand market reach prudently.

World Acceptance Corporate Events

Business Operations and StrategyFinancial Disclosures
World Acceptance Reports Q4 2025 Financial Results
Positive
Apr 29, 2025

World Acceptance Corporation reported its financial results for the fourth quarter of fiscal 2025, highlighting improved earnings driven by increased tax preparation revenue and a $2.8 million after-tax release of share-based compensation expense. The company achieved a net income of $44.3 million, with total revenues rising to $165.3 million, a 3.8% increase from the previous year. Despite a decrease in gross loans outstanding and challenges with credit losses, the customer base grew by 3.5%, and the company expects continued improvement in portfolio yields due to strategic adjustments in loan volume and underwriting practices.

Spark’s Take on WRLD Stock

According to Spark, TipRanks’ AI Analyst, WRLD is a Outperform.

World Acceptance Corporation has a solid financial performance with excellent profitability and cash flow, reinforced by a strong balance sheet. The technical analysis shows a neutral trend without significant upward or downward momentum. Valuation metrics indicate potential undervaluation, enhancing its attractiveness. The recent earnings call highlights effective strategic shifts and growth, though some risks in large loans persist. Overall, the stock presents a promising opportunity with moderate risks.

To see Spark’s full report on WRLD stock, click here.

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.