Enova International (ENVA), mcap=$984m, price $31.18 vs $36.06

$ENVA pitch:
– Subprime and near-prime online lenders to consumers and SMBs.
– The stock is very cheap (PE of 4x-6x), and the business is substantially overcapitalized/underlevered.
– ENVA is exceptionally well run with thoughtful/prudent/disciplined underwriting.
– Having achieved the necessary scale, the company is well-positioned with a very long runway for earnings growth.
– Management is aggressively repurchasing shares at highly accretive prices ($217m LTM buybacks out of $1.2bn mcap).
– The market is overestimating the risk of material consumer credit losses.

$ENVA valuation:
– Set to earn $8 next year and $10 in 2024.
– At 6x-8x multiple results in a 50% to +150% upside from current levels.
– Trades near the historically lowest 1.1x BV and 1.5x TBV – a source of strong downside protection.

Exp. gain: 100%+ by 2024.

Full ENVA write-up (free guest account required):

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