World Acceptance Corporation (NASDAQ:WRLD) has been returning a significant amount to investors in the form of share price appreciation. World Acceptance stock price soared more than 20% after beating revenue and earnings estimates for the third quarter of fiscal 2018. WRLD stock price soared more than 96% in the last twelve months, thanks to improving financial numbers and smart business strategies.
In the third quarter, the company has beaten revenue estimates by $1.47 million, while its earnings have topped the consensus estimate by $0.38 per share.
In the third quarter, the company generated sales of $136 million, up 4% compared to the same period last year. Excluding the impact of the DTA Write-Down, World Acceptance Corp generated net income of $12.2 million, up 26% from $9.6 million in the prior year period.
An improvement was observed across all the business segments. The company’s interest and fee income surged to $118.3 million, representing a year over year growth of 4.2%, thanks to the growth in average earning loans.
Moreover, Insurance and other income enlarged by 8.9% to $13.7 million, relative to $12.6 million in the third quarter of fiscal 2017.
The total number of accounts in the US that were 61 days or more past, increased at a respectable rate of 5.7% on a recency basis, compared to 5.4% in the prior year period.
World Acceptance appears in a strong cash and liquidity position considering the debt to equity ratio of 0.7, significantly lower from the industry average of 2.2.
Despite a sharp rally, the stock trades at attractive valuations. At present, its stock is trading around 13 times to earnings and 1.7 times to sales, when the industry average is around 28 and 4.7 times, respectively. Moving forward, World Acceptance Corporation expects to generate high single-digit growth in sales and a double-digit growth in earnings. Thus, WRLD stock valuations are likely to offer support to its share price.
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