CPSS Intrinsic Value – CONSUMER PORTFOLIO SERVICES Reports Second Quarter Earnings Results for FY2023
August 24, 2023
🌥️Earnings Overview
On August 3, 2023, CONSUMER PORTFOLIO SERVICES ($NASDAQ:CPSS) revealed their fiscal year 2023 second quarter earnings results ending June 30, 2023. The total revenue for the period was USD 49.1 million, which represents a 22.3% decrease from the same quarter of the prior year. Additionally, their net income for the quarter decreased 44.9% compared to the same period in the prior year, totaling USD 14.0 million.
Market Price
The stock opened at $10.8 and closed at $11.4, down by 3.2% from its previous closing price of 11.8. This decline was due to the company’s earnings report, which was weaker than expected. The main factor causing the weak earnings report was the company’s low revenue performance in the quarter, which was 11% lower than the same quarter last year. This decline in revenue was attributed to weaker demand for consumer portfolio services and increasing competition from other companies in the industry.
This drop in profits was due to higher spending on marketing and higher costs of operations as the company tried to expand its operations into new markets. The company is currently working towards strategies to improve its performance and increase its revenue in order to turn around its weak performance. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for CPSS. More…
| Total Revenues | Net Income | Net Margin |
| 220.47 | 67.33 | 30.5% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for CPSS. More…
| Operations | Investing | Financing |
| 212.77 | -713.9 | 484.21 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for CPSS. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 2.85k | 2.6k | 11.69 |
Key Ratios Snapshot
Some of the financial key ratios for CPSS are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 3.3% | – | – |
| FCF Margin | ROE | ROA |
| 95.6% | 23.1% | 2.0% |
Analysis – CPSS Intrinsic Value
At GoodWhale, we have conducted an analysis of CONSUMER PORTFOLIO SERVICES’s fundamentals. After taking into account the company’s financial statements, market performance, and other factors, we have determined that the intrinsic value of CONSUMER PORTFOLIO SERVICES share is around $8.6, which was calculated through our proprietary Valuation Line. At this time, however, CONSUMER PORTFOLIO SERVICES stock is trading at $11.4, meaning it is overvalued by 33.2%. We believe investors should be aware of this discrepancy before deciding to buy or sell any shares of CONSUMER PORTFOLIO SERVICES. More…
Peers
The company has been in operation for over 20 years and has a strong presence in the United States. The company has a strong competition with Credit Acceptance Corp, Axis Auto Finance Inc, PT Danasupra Erapacific Tbk.
– Credit Acceptance Corp ($NASDAQ:CACC)
Acceptance Corporation is an American company that provides auto finance services for customers with poor credit scores. The company was founded in 1972 and is headquartered in Southfield, Michigan. As of 2019, the company had approximately 2.5 million customers and $4.7 billion in managed receivables.
The company’s market cap is 6.09B as of 2022 and its ROE is 41.42%. The company has been growing at a rapid pace and has been able to generate significant returns for its shareholders. The company’s business model is based on providing financing to customers with poor credit scores, which has proven to be a successful strategy.
– Axis Auto Finance Inc ($TSX:AXIS)
Axis Auto Finance Inc is a subprime auto lender that offers financing solutions to customers with poor credit. The company has a market cap of $67.61 million and a return on equity of 2.59%. Axis Auto Finance Inc operates in the United States and Canada. The company was founded in 2006 and is headquartered in Toronto, Canada.
– PT Danasupra Erapacific Tbk ($IDX:DEFI)
Danasupra Erapacific Tbk has a market cap of 999.97B as of 2022. The company is engaged in the exploration, production, and marketing of crude oil and natural gas. It also has refining and petrochemical operations. The company has operations in Indonesia, Malaysia, Singapore, Thailand, and Vietnam.
Summary
Investors in Consumer Portfolio Services were disappointed by the company’s second-quarter earnings results for FY2023, with revenue falling 22.3% from the same quarter of the previous year and net income decreasing 44.9%. The stock price reacted accordingly, dropping on the day of the announcement. Analysts are divided on the outlook for Consumer Portfolio Services, with some urging caution given the uncertain economic conditions facing the company while others see potential for short-term gains as the market adjusts to the news. Overall, investors should proceed with caution when considering an investment in Consumer Portfolio Services.
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