Markets
CFR

Can Loan Growth Aid Enova International (ENVA) Q3 Earnings?

Enova InternationalENVA is scheduled to report third-quarter 2018 results on Oct 25, after the market closes . The company is expected to witness year-over-year growth in revenues and earnings.

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

Notably, Enova boasts an impressive surprise history. It surpassed earnings estimates in each of the trailing four quarters with an average beat of 39.9%.

Enova International, Inc. Price and EPS Surprise

Enova International, Inc. Price and EPS Surprise | Enova International, Inc. Quote

However, the company's activities in the third quarter were not able to impress the analysts. As a result, the Zacks Consensus Estimate for earnings of 47 cents has remained stable over the past 30 days. Nonetheless, the figure represents year-over-year growth of 88%.

Moreover, the consensus estimate for revenues of $267.5 million reflects a rise of 22.8% from the prior-year quarter.

Before we take a look at what our quantitative model predicts, let's check the factors that are expected to impact third-quarter results.

Factors at Play

Growth in Loans: The company's efforts to grow loan portfolio by increasing awareness of its products is likely to have attracted new customers and thus result in higher loans originations in this quarter as well.

Foreign Exchange Fluctuations Might Impact Revenues: The company remains exposed to foreign exchange risks as it has businesses in the United Kingdom and Brazil. Thus, weakness in the British pound sterling during the third quarter on account of Brexit might result in lower international revenues of which 85.2% is generated from the United Kingdom.

Overall Revenues to Rise: Given the rise in loan, overall revenues are likely to increase during the quarter. Notably, management expects total revenues in the range of $260-$275 million compared with $218 million earned in year-ago quarter.

Expenses to Remain High: Enova's expenses are likely to escalate during the quarter due to its efforts to attract new customers and marketing of new and existing products.

Management expects marketing costs to be higher compared to the year-ago quarter. It will likely be in the mid-teens percentage of revenues during 2018.

Earnings Whispers

According to our quantitative model, we cannot conclusively predict an earnings beat for Enova in the upcoming results. 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 -7.53%.

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

Stocks That Warrant a Look

Here are some stocks worth considering, as they have the right combination of elements to post an earnings beat this quarter.

SVB Financial Group SIVB is slated to report third-quarter 2018 results on Oct 25. It has an Earnings ESP of +1.22% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

T. Rowe Price Group TROW has an Earnings ESP of +0.78% and carries a Zacks Rank of 2 (Buy). The company is slated to release results on Oct 25.

Cullen/Frost Bankers CFR is also slated to release results on Oct 25. It has an Earnings ESP of +0.07% and carries a Zacks Rank #3.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Cullen/Frost Bankers, Inc. (CFR): Free Stock Analysis Report

SVB Financial Group (SIVB): Free Stock Analysis Report

Enova International, Inc. (ENVA): Free Stock Analysis Report

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

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

CFR TROW SIVB ENVA

Other Topics

Earnings Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More