Zacks Investment Research downgraded
DFC Global Corp
) to a Zacks Rank #5 (Strong Sell) on Aug 27.
DFC GLOBAL CORP (DLLR): Free Stock Analysis
FLEETCOR TECH (FLT): Free Stock Analysis
FINANCIAL ENGIN (FNGN): Free Stock Analysis
SS&C TECHNOLOGS (SSNC): Free Stock Analysis
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Why the Downgrade?
DFC Global has witnessed sharp downward estimate revisions after
reporting disappointing fiscal fourth quarter and 2013 results.
On Aug 22, DFC Global reported fiscal fourth quarter and 2013
earnings results. Fiscal fourth quarter earnings per share lagged
the year-ago earnings of 58 cents per share by 15.5%, though it
surpassed the Zacks Consensus Estimate by 4.3%.
Though the total revenue of DFC Global for the quarter inched up
0.9% year over year, it fell short of the Zacks Consensus
estimate by 21%.
Fiscal 2013 bottom line fell short of the year ago earnings by
Operating expenses in the reported quarter escalated 20.2% year
The extent of increase in operating expenses offset the increase
in revenue, thereby pulling down operating income by 31.9% year
over year to $67.3 million in the reported quarter. Adjusted
earnings before interest, tax, depreciation and amortization
(EBITDA) were $69.3 million, down 11.7% year over year.
While DFC Global exited fiscal 2013 with cash and cash
equivalents of 196.2 million, down 12.4% year over year,
long-term debt increased 3.8% year over year to $975 million as
of Jun 30, 2013.
DFC Global expects to incur expense in the range of $10.0
million-$15.0 million to support ongoing regulatory related
activities, including regulatory advisory costs, legal opinion
and analysis, and audit and regulatory compliance costs in fiscal
The Zacks Consensus Estimate for fiscal 2014 slumped 86% to $1.12
per share over the last 7 days and all 4 estimates moved south.
For fiscal 2015, 1 of 4 estimates was revised downward over the
same time frame, sinking the Zacks Consensus Estimate by 36% to
$1.66 per share.
Other Stocks to Consider
Not all stocks in the sector are performing as poorly as DFC
Global. Miscellaneous financial service providers
FleetCor Technologies, Inc
) with Zacks Rank #1 (Strong Buy) and
Financial Engines, Inc
SS&C Technologies Holdings, Inc
) with Zacks Rank #2 (Buy) are worth considering.