Have you been paying attention to shares of World Acceptance (WRLD)? Shares have been on the move with the stock up 33.8% over the past month. The stock hit a new 52-week high of $161.63 in the previous session. World Acceptance has gained 33.8% since the start of the year compared to the 26.5% move for the Zacks Finance sector and the 50% return for the Zacks Financial - Consumer Loans industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on January 28, 2025, World Acceptance reported EPS of $2.45 versus consensus estimate of $1.23.
For the current fiscal year, World Acceptance is expected to post earnings of $12.88 per share on $557.22 million in revenues. This represents a -2.35% change in EPS on a -2.79% change in revenues. For the next fiscal year, the company is expected to earn $13.68 per share on $561.56 million in revenues. This represents a year-over-year change of 6.21% and 0.78%, respectively.
Valuation Metrics
World Acceptance may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
World Acceptance has a Value Score of A. The stock's Growth and Momentum Scores are C and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 11.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 10.8X. On a trailing cash flow basis, the stock currently trades at 8.8X versus its peer group's average of 11.5X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, World Acceptance currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if World Acceptance passes the test. Thus, it seems as though World Acceptance shares could still be poised for more gains ahead.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
