Every cloud has a silver lining, and in the world of finance, that silver lining could be Consumer Portfolio Services (CPS). As we approach June 2024, investors are keen to identify reliable investment opportunities, and CPS, a key player in the Credit Services industry, is worth a closer look.
Despite a challenging environment marked by a quarterly revenue decline of 20%, CPS has managed to maintain a robust profit margin of 21.13%. This resilience is largely due to its strong net interest income of $196.4M, a testament to its effective interest income strategies that have generated $331.6M.
The company's current valuation stands at $2.75B, with an enterprise value slightly lower at $2.7B. This discrepancy, coupled with a book value of $12.97 per share, suggests that the stock may be undervalued, offering potential upside for investors.
However, it's not all smooth sailing. The company's probability of bankruptcy stands at a concerning 45.72%, a risk that investors must weigh against the potential rewards. Additionally, the company's cash position is relatively weak, with cash and equivalents totaling just $11.35M.
In conclusion, while CPS presents some attractive financial metrics, it also carries significant risk. Investors considering this stock should conduct thorough due diligence and consider their risk tolerance before making a decision. For those interested in the consumer finance sector, it's worthwhile to closely examine Consumer Portfolio Services to better assess its true value. We will determine if the shares of Consumer Portfolio are reasonably priced as we approach June. Is the valuation of Consumer Portfolio justified? We will delve into the company's valuation perspective to provide a clearer outlook for potential investors in this stock.
We determine the current worth of Consumer Portfolio Services using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Consumer Portfolio based exclusively on its
fundamental and basic
technical indicators. By analyzing Consumer Portfolio's
financials, quarterly and monthly indicators, and related drivers such as
dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of
Consumer Portfolio's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Consumer Portfolio. We calculate exposure to Consumer Portfolio's
market risk, different
technical and
fundamental indicators, relevant financial multiples and ratios, and then
comparing them to Consumer Portfolio's related companies.
Consumer Portfolio Investment Alerts
Consumer investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Consumer Portfolio Services performance across your portfolios.Please check all
investment alerts for Consumer
Consumer Portfolio Valuation Ratios as Compared to Competition
Our valuation model uses many indicators to compare Consumer value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Consumer Portfolio competition to find
correlations between indicators driving the intrinsic value of Consumer.
Consumer Portfolio Gross Profit
Consumer Portfolio Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Consumer Portfolio previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Consumer Portfolio Gross Profit growth over the last 10 years. Please check Consumer Portfolio's
gross profit and other
fundamental indicators for more details.
Another Deeper Perspective
The entity reported the previous year's revenue of 340.01
M. Net Income was 45.34
M with profit before overhead, payroll, taxes, and interest of 254.19
M.
Margins Breakdown
Consumer profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Consumer Portfolio itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Consumer Portfolio profit margins.
0.59
Operating Profit Margin
| Pretax Profit Margin | 0.19 |
| Operating Profit Margin | 0.59 |
| Net Profit Margin | 0.14 |
| Gross Profit Margin | 0.78 |
Consumer Portfolio Price To Sales Ratio is comparatively stable at the moment.
Moreover, Consumer Portfolio Enterprise Value is increasing over the last 4 years. Every cloud has a silver lining, and for investors, Consumer Portfolio Services might just be that glimmer of hope. Despite a negative quarterly revenue growth of -0.2 and a risk-adjusted performance of -0.01, the company maintains a strong book value of 12.97 and a net income of $45.34 million. With a market capitalization of $184.89 million and an enterprise value of $2.7 billion, the stock is undervalued, trading at a price to book ratio of 0.71X. However, investors should consider the company's high beta of 2.09, indicating a higher level of volatility compared to the market. In conclusion, while Consumer Portfolio Services stock presents potential upside, it should be approached with caution due to its inherent risk..
Consumer is expecting lower volatility in June
Despite Consumer Portfolio Services' current risk-adjusted performance of -0.01, the company anticipates a decrease in volatility for June. This implies a more stable market environment, potentially leading to predictable returns for investors. However, investors should continuously monitor the stock's performance and market conditions, as volatility can change quickly. Consumer Portfolio Services shows low volatility with a skewness of 0.86 and kurtosis of 0.6. Understanding market volatility trends can help investors time the market.
Using volatility indicators correctly allows traders to measure Consumer Portfolio's stock risk against market volatility in both bullish and bearish trends. The increased volatility of bear markets can directly affect Consumer Portfolio's stock price and stress investors as they see their share values drop, often prompting portfolio rebalancing through the purchase of diverse financial instruments.In conclusion, the current market valuation of Consumer Portfolio Services stands at
$8.78, slightly above its real value of $8.29. This suggests that the stock may be slightly overvalued at present. Furthermore, the analyst overall consensus for the stock is a 'Strong Sell', indicating a bearish outlook. However, the highest estimated target price by analysts is
$8.88, which offers a glimmer of upside potential. Therefore, while there may be some opportunities left for Consumer Portfolio in June, investors should exercise caution and thoroughly evaluate the risk-reward scenario before making any investment decisions..
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Rifka Kats is a Member of Macroaxis Editorial Board. Rifka writes about retail product and service companies from the perspective of a regular consumer and sophisticated investor at the same time. She is passionate about corporate ethics and equality in the workforce.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Rifka Kats do not own shares of Consumer Portfolio Services. Please refer to our
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