Can Loan Growth Aid Enova International (ENVA) Q4 Earnings?

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Enova International ENVA is scheduled to report fourth-quarter and 2019 results on Jan 29, after market close. The company is expected to have witnessed year-over-year growth in revenues and earnings.

In the last reported quarter, the Chicago, IL-based online financial services provider displayed organic growth. Continued rise in revenues and loan growth were the key highlights. However, the positives were partially offset by higher expenses.

Enova boasts an impressive surprise history. It surpassed earnings estimates in each of the trailing four quarters, the average beat being 15.3%.

Enova International, Inc. Price and EPS Surprise

Enova International, Inc. Price and EPS Surprise

Enova International, Inc. price-eps-surprise | Enova International, Inc. Quote

The company’s activities in the fourth quarter were inadequate to impress analysts. As a result, the Zacks Consensus Estimate for earnings of $1.03 has been stable over the past seven days. Nonetheless, the figure indicates surge of 98% from the year-ago reported number.

Moreover, the consensus estimate for revenues of $341.6 million suggests a rise of 9.3%.

Factors at Play

Growth in Loans: The company’s efforts to grow loan portfolio by increasing awareness of its products are likely to have attracted new customers, and thus resulted in higher loans originations in the fourth quarter. Also, it is likely to have benefited from decent consumer lending scenario.

Higher Revenues: Given the expectations of rise in loan, overall revenues are likely to have increased during the quarter. However, this is likely to have been partially offset by lower interest rates and the company’s planned exit from the U.K. market.

Notably, management expects total revenues in the range of $329-$344 million for the fourth quarter compared with $312 million generated in year-ago quarter.

Rise in Expenses: Enova’s expenses are likely to have escalated due to its efforts to attract new customers, and marketing of new and existing products.

Earnings Whispers

According to our quantitative model, we cannot conclusively predict an earnings beat for Enova this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #3 (Hold) or better for this to happen, which is not the case here as elaborated below.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Enova has an Earnings ESP of 0.00%.

Zacks Rank: The stock currently carries a Zacks Rank #3.

Stocks to Consider

Principal Financial Group, Inc. PFG is slated to release results on Jan 28. The company has an Earnings ESP of +0.76% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

T. Rowe Price Group, Inc. TROW has an Earnings ESP of +1.47% and holds a Zacks Rank of 2. It is scheduled to report December-quarter results on Jan 29.

Invesco Ltd. IVZ is set to release earnings on Jan 29. The company has an Earnings ESP of +1.39% and currently carries a Zacks Rank of 2.

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Enova International, Inc. (ENVA) : Free Stock Analysis Report
 
T. Rowe Price Group, Inc. (TROW) : Free Stock Analysis Report
 
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