First Cash Financial Services Earnings Preview

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First Cash Financial Services (NAS: FCFS) will try to beat its earnings estimates for the fifth consecutive quarter. The company will unveil its latest earnings on Wednesday, Oct. 19. First Cash Financial Services is an operator of pawn and consumer finance stores in the United States and Mexico.

What analysts say:

  • Buy, sell, or hold?: Analysts are bullish on this stock, with seven analysts rating it as a buy and only one rating it as a sell. Analysts don't like First Cash Financial Services as much as competitor Cash America International overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $132.5 million in revenue this quarter. That would represent a rise of 22.4% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.55 per share. Estimates range from $0.53 to $0.57.

What our community says:
CAPS All-Stars are solidly behind the stock, with 95.9% awarding it an "outperform" rating. The community at large concurs with the All-Stars, with 96.1% assigning it a rating of "outperform." Fools have embraced First Cash Financial Services and haven't been shy with their opinions lately, logging 210 posts in the past 30 days. Even with a robust four out of five stars, First Cash Financial Services' CAPS rating falls a little short of the community's upbeat outlook.

Management:
First Cash Financial Services' profit has risen year over year by an average of 41.5% over the past five quarters. The company's gross margin shrank by 2.1 percentage points in the last quarter. Revenue rose 23.4% while cost of sales rose 29.7% to $51.6 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters. 

QuarterQ2Q1Q4Q3
Gross Margin57.2%58.2%58.4%59.5%
Operating Margin19.4%20.2%22.2%20.0%
Net Margin12.7%18.7%15.1%13.2%
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