GICS Sector : Financial Services
ECN Capital Corp.originates, manages, and advises on prime consumer credit portfolios in North America.It operates through Secured Consumer Loans - Triad Financial Services and Source One; and Consumer Credit Card and Related Unsecured Consumer Loans - KG segments.
ECN Capital reported adjusted per-share income of $0.04, in line with consensus, and originations totaled $804 million for the second quarter, with adjusted EBITDA of $31.5 million and adjusted operating income of $17 million. The company's EPS came out at $0.05446, slightly below estimates of $0.0555. Revenue for the quarter was not explicitly stated, but we can infer that the company is making progress in its turnaround efforts, particularly in the sales team, which has reduced turnaround time from 2-3 days to 2-3 hours.
Publication Date: Aug -19
The company's Triad Financial business achieved record originations of $436 million, a 40% year-over-year increase, and managed assets in the servicing business grew to over $6 billion, a 15% increase in Q2, representing a 16% compound annual growth rate (CAGR) over the past 7 years. Servicing revenue now accounts for 20% of the company's total revenue. Adjusted operating income for RV & Marine was $3.1 million, impacted by industry headwinds and a delayed asset sale.
The RV & Marine segment is undergoing an upgrade strategy, which incurred costs of $750,000 to $1 million, with most of it incurred in H1, and the rest to be incurred in H2, which will be offset with increased originations and margins. The asset sales from Source One were delayed due to lower originations in the first half but will move in H2 at better margins. The company's Manufactured Housing Finance guidance is reaffirmed at $78 million to $90 million.
At current prices, ECN Capital trades at a P/E Ratio of 41.03, a P/B Ratio of 2.79, and a P/S Ratio of 2.62. The stock also offers a Dividend Yield of 2.02% and a Free Cash Flow Yield of 13.8%. According to <a href="https://www.bloomberg.com/markets/stocks">Bloomberg</a>, analysts estimate next year's revenue growth at 12.1%. With a Net Debt / EBITDA of 12.86, the company's valuation seems to be pricing in significant growth expectations.
The company has made significant progress in its turnaround efforts, particularly in the sales team, which has reduced turnaround time from 2-3 days to 2-3 hours. The July start was strong, with $60 million in sales, almost meeting the aggressive budget. The new sales team, led by Joe, has enhanced product development and execution on process. The company has also made strategic hires during the downturn, similar to those made at IFG and Triad.
The CEO is optimistic about the growth prospects, particularly in the commercial side, where Cody Pearce, with expertise from Cascade and YES Communities, will focus on turning back on growth. The Blackstone relationship was renewed, with terms of 12-24 months, and the company is overfunded by approximately $1.5 billion.
ECN Capital Corp (ECNCF) Q3 2025 Earnings Call Highlights: Strong Revenue Growth Amid Rising ...
Nov -14
ECN Capital to be taken private in deal led by Warburg Pincus
Nov -13
ECN Capital Agrees to be Acquired by an Investor Group led by Warburg Pincus
Nov -13
ECN Capital enters into definitive agreement to be acquired by an investor group led by Warburg Pincus
Nov -13
ECN Capital Reports US$0.06 in Adjusted Net Income per Common Share in Q3-2025
Nov -13
ECN Capital Reschedules Q3-2025 Conference Call
Nov -12
ECN Capital Second Quarter 2025 Earnings: Revenues Beat Expectations
Aug -10
ECN Capital Downgraded to Market Perform at Raymond James
Aug -08
ECN Capital Corp.'s Manufactured Housing Finance segment growth of 7.88% is driven by increasing demand for affordable housing, government initiatives supporting low-income families, and the company's strategic expansion into new markets. Additionally, the segment benefits from a strong balance sheet, allowing for competitive pricing and efficient operations.
ECN Capital Corp.'s 7.88% growth in Recreational Vehicle and Marine Finance is driven by increasing consumer spending on outdoor activities, rising demand for luxury RVs and boats, and strategic partnerships with manufacturers and dealerships. Additionally, low interest rates and government incentives for outdoor recreation have contributed to the segment's growth.
ECN Capital Corp.'s 8.9% growth is driven by its diversified portfolio of commercial and consumer finance businesses, strong originations, and strategic acquisitions. The company's focus on digital transformation, cost savings initiatives, and expansion into new markets also contribute to its growth momentum.
Provides financing solutions to businesses, including equipment financing, transportation financing, and inventory financing.
Offers financing solutions to vendors and manufacturers, enabling them to provide financing options to their customers.
Provides financing solutions to homeowners for home improvement projects, such as roofing, HVAC, and solar installations.
Offers financing solutions for industrial equipment, including construction, manufacturing, and energy equipment.
Provides financing solutions for railcars, locomotives, and other rail-related equipment.
Offers financing solutions for aircraft, including commercial and business aircraft.
ECN Capital Corp. operates in a niche market, but there are some substitutes available. However, the company's strong brand recognition and customer loyalty mitigate the threat of substitutes.
ECN Capital Corp.'s customers have limited bargaining power due to the company's diversified customer base and lack of concentration.
ECN Capital Corp. has a moderate level of dependence on its suppliers, but the company's scale and negotiating power help to mitigate the bargaining power of suppliers.
The threat of new entrants is low due to the high barriers to entry in ECN Capital Corp.'s industry, including regulatory hurdles and the need for significant capital investment.
The industry in which ECN Capital Corp. operates is highly competitive, with several established players competing for market share.
| Value | |
|---|---|
| Debt Weight | 81.41% |
| Debt Cost | 3.95% |
| Equity Weight | 18.59% |
| Equity Cost | 10.19% |
| WACC | 5.11% |
| Leverage | 438.07% |
Value: 3.6
Growth: 4.1
Quality: 4.0
Yield: 6.0
Momentum: 8.0
Volatility: 5.0
1-Year Total Return ->
Value: 6.6
Growth: 3.9
Quality: 6.6
Yield: 0.0
Momentum: 6.5
Volatility: 3.0
1-Year Total Return ->
Value: 1.6
Growth: 5.4
Quality: 8.2
Yield: 0.0
Momentum: 10.0
Volatility: 0.0
1-Year Total Return ->
Value: 8.4
Growth: 6.4
Quality: 4.7
Yield: 0.0
Momentum: 1.0
Volatility: 2.3
1-Year Total Return ->
Value: 7.3
Growth: 5.0
Quality: 4.8
Yield: 0.0
Momentum: 2.0
Volatility: 3.7
1-Year Total Return ->
Value: 8.2
Growth: 0.3
Quality: 4.6
Yield: 0.0
Momentum: 5.0
Volatility: 1.7
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