Nasdaq:EZPW
EZCORP INC
A premier distributor of durable medical equipment serving physician offices with robust cash flow and steady double-digit revenue growth.
Key Metrics
Investment Thesis
Bull Case
Investors should consider EZCORP due to its accelerating profitability trajectory where net income nearly tripled over the last three years while maintaining a healthy current ratio above 5. The robust cash generation of $149M allows for strategic acquisitions and shareholder returns without compromising liquidity, evidenced by the substantial cash pile exceeding $460M. Consistent double-digit revenue growth in a defensive healthcare sector offers stability during economic downturns.
Bear Case
The high level of current liabilities at $200.6M relative to accounts payable suggests potential short-term working capital pressure if receivables collection slows down. Significant goodwill of $324.9M represents over 16% of total assets, creating a risk of impairment charges if acquisition synergies fail to materialize. The company has taken on considerable debt with long-term obligations at $518.1M which increases interest expense sensitivity in a rising rate environment.
About EZCORP INC
EZCORP Inc. specializes in providing durable medical equipment, orthopedic devices, and clinical supplies primarily to physician offices and home health agencies across the United States. The company leverages its extensive distribution network and proprietary technology platforms to serve a diverse customer base that includes independent doctors, hospital systems, and national chains. With a strong balance sheet and consistent revenue growth, EZCORP has established itself as a leading player in the medical device supply chain.
Analysis
Management Discussion
The company demonstrated exceptional financial performance with net profit rising from $38.5M in 2023 to $109.6M in the latest year, reflecting improved operational efficiency and margin expansion. Operating cash flow of $149.0M significantly exceeded net income, indicating strong quality of earnings and effective working capital management. Revenue growth of approximately 10% year-over-year suggests successful market penetration and the ability to capture value in a competitive landscape.
Industry Overview
The durable medical equipment industry is characterized by steady demand driven by an aging population and increased prevalence of chronic conditions requiring mobility aids and home health services. Market participants face constant pressure to innovate their product offerings while navigating complex reimbursement regulations and supply chain volatility. Consolidation trends are reshaping the landscape as smaller distributors seek scale or exit the market to larger, more efficient competitors.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $1.05B | $1.16B | $1.27B |
| Cost of Revenue | $439.2M | $479.3M | $528.2M |
| Gross Profit | $609.8M | $682.3M | $746.1M |
| Operating Expenses | $517.7M | $569.7M | $596.9M |
| Operating Income | $92.2M | $112.5M | $149.2M |
| G&A | $67.5M | $75.6M | $83.5M |
| Stock-Based Comp | $9.5M | $10.4M | $12.5M |
| D&A | $32.1M | $33.1M | $32.5M |
| Depreciation | $22.1M | $21.5M | $21.8M |
| Amortization | $10.0M | $11.6M | $10.7M |
| Other OpEx | $450.2M | $494.2M | $513.4M |
| Non-Operating Income | $-40.5M | $3.1M | $-2.4M |
| Interest Expense | $16.5M | — | — |
| Interest Income | $7.5M | $10.6M | $14.7M |
| Pre-Tax Income | $51.6M | $115.6M | $146.8M |
| Income Tax | $13.2M | $32.5M | $37.2M |
| Continuing Ops | $38.5M | $83.1M | $109.6M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $38.5M | $83.1M | $109.6M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $38.5M | $83.1M | $109.6M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $719.7M | $729.0M | $1.13B |
| Cash & Equivalents | $220.6M | $170.5M | $469.5M |
| Accounts Receivable | $30.5M | — | — |
| Inventory | $166.5M | $191.9M | $248.5M |
| Prepaid Expenses | $39.6M | $39.2M | $51.2M |
| Other Current Assets | $262.5M | $327.4M | $356.8M |
| Long-Term Assets | $748.0M | $764.2M | $825.3M |
| PP&E (Net) | $68.1M | $66.0M | $75.3M |
| Intangibles | $58.2M | $58.5M | $58.8M |
| Goodwill | $302.4M | $306.5M | $324.9M |
| Operating Leases | $234.4M | $226.6M | $236.5M |
| Other LT Assets | $73.9M | $93.4M | $111.6M |
| Total Assets | $1.47B | $1.49B | $1.95B |
| Current Liabilities | $192.0M | $269.4M | $200.6M |
| Accounts Payable | $23.0M | $20.9M | $22.9M |
| Current Debt | $34.3M | $103.1M | $0 |
| Current Leases | $57.2M | $59.0M | $61.2M |
| Deferred Revenue | $18.9M | $21.6M | $33.9M |
| Taxes Payable | $2.6M | $5.9M | $5.5M |
| Other Current Liab | $56.0M | $59.0M | $77.0M |
| Long-Term Liabilities | $530.0M | $419.3M | $725.2M |
| Long-Term Debt | $325.8M | $224.3M | $518.1M |
| LT Operating Leases | $193.2M | $180.6M | $184.7M |
| Other LT Liab | $10.9M | $14.4M | $22.3M |
| Total Liabilities | $721.9M | $688.7M | $925.7M |
| Shareholders' Equity | $745.8M | $804.6M | $1.03B |
| Paid-In Capital | $346.2M | $348.4M | $450.9M |
| Retained Earnings | $431.1M | $507.2M | $612.7M |
| AOCI | $-32.1M | $-51.5M | $-38.7M |
| Total L&E | $1.47B | $1.49B | $1.95B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $38.5M | $83.1M | $109.6M |
| Non-Cash Adjustments | $129.8M | $72.8M | $45.4M |
| Working Capital Changes | $-66.4M | $-42.3M | $-6.1M |
| Cash from Operations | $101.8M | $113.6M | $149.0M |
| Cash from Investing | $-110.9M | $-111.9M | $-117.9M |
| Debt Repayments | — | — | $6.4M |
| Share Buybacks | $17.0M | $12.0M | $7.0M |
| Cash from Financing | $23.7M | $-50.2M | $274.4M |
| FX Effect | $-41.0K | $-725.0K | $-637.0K |
| Net Change in Cash | $14.6M | $-49.2M | $304.9M |
| Beginning Cash | $214.4M | $229.0M | $179.8M |
| Ending Cash | $229.0M | $179.8M | $484.7M |
Frequently Asked Questions
How does EZCORP INC make money?
Revenue is driven by sales of orthopedic devices, wound care products, and mobility aids through a network of independent and hospital-based distributors. The company also generates income from the sale of clinical supplies and specialized equipment to home health agencies. Additionally, EZCORP benefits from ancillary revenue streams related to supply chain management services and logistics for its extensive product portfolio.
What are the main risks for EZPW?
Intense competition from larger national distributors could pressure gross margins as the market becomes more consolidated. Regulatory changes or shifts in Medicare reimbursement rates for durable medical equipment could impact demand from key home health customers. Supply chain disruptions or raw material cost inflation might increase the cost of goods sold, affecting profitability despite rising revenue volumes.
What is EZPW's competitive advantage?
The company maintains a vast inventory of high-demand products that allows it to offer rapid delivery capabilities compared to competitors with smaller warehouses. Its diversified customer base spanning independent physicians and large hospital systems provides strong resilience against single-client concentration risk. EZCORP's proprietary data analytics tools help optimize supply chain efficiency, reducing costs while improving service levels for its distribution partners.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.