Nicholas Financial, Inc. (NICK) | Investment Case

1. Company Snapshot

1.a. Company Description

Nicholas Financial, Inc.operates as a consumer finance company in the United States.The company engages in acquiring and servicing automobile finance installment contracts for the purchase of new and used automobiles and light trucks.

It also originates direct consumer loans and sells consumer-finance related products.As of March 31, 2022, the company operated 47 branch offices located in Alabama, Florida, Georgia, Idaho, Illinois, Indiana, Kentucky, Michigan, Missouri, Nevada, North Carolina, Nevada, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Utah, and Wisconsin.Nicholas Financial, Inc.

was founded in 1985 and is headquartered in Clearwater, Florida.

Show Full description

1.b. Last Insights on NICK

Nicholas Financial, Inc.'s recent performance was negatively impacted by a decline in loan originations and a decrease in net interest income. The company's inability to maintain its loan growth momentum, coupled with a rise in operating expenses, likely contributed to the decline. Additionally, the absence of any notable acquisitions or new product launches during the period further exacerbated the negative trend.

1.c. Company Highlights

Last Price	6.19
Change Percentage	-0.16%
Open	6.07
Previous Close	6.2
Market Cap ( Millions)	45
Volume	4554
Year High	7.55
Year Low	4.37
M A 50	6.09
M A 200	6.56

FCF Yield	12.62%
Dividend Yield	0.00%
ROE	-4.98%
Debt / Equity	11.71%
Net Debt / EBIDTA	12040.95%
Price To Book	0.64
Price Earnings Ratio	-12.97
Price To FCF	7.92
Price To sales	2.98
EV / EBITDA	-212.63

2. Transcript Summary

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3. NewsRoom

OUTFRONT MEDIA APPOINTS GLOBAL MEDIA EXECUTIVE NICK BRIEN AS CEO AND BOLSTERS BOARD WITH MAGNITE'S MICHAEL BARRETT AND NETFLIX'S NICOLLE PANGIS

Aug -21

Source: prnewswire.com

Nickelex Announces Name Change to Paradigm Gold Corporation and Share Consolidation

Apr -08

Source: newsfilecorp.com

NICK HALL LEADS ‘AMAZING GRACE' WITH HUGE CROWD IN TIMES SQUARE, PROPELLING ANTHEM OF GRACE CAMPAIGN FURTHER DURING JESUS WEEK EVENT

Jun -11

Source: globenewswire.com

Shareholders in AlzChem Group (ETR:ACT) are in the red if they invested five years ago

Oct -10

Source:

Olive Garden parent Darden stands by outlook after mixed quarterly results

Sep -22

Source: CNBC

Nicholas Financial's Boise, Idaho Grand Opening

Jun -11

Source: GlobeNewsWire

Nicholas Financial Reports 4th Quarter and Fiscal Year 2021 Results

Jun -02

Source: GlobeNewsWire

Nicholas Financial's Salt Lake City Grand Opening

Mar -08

Source: GlobeNewsWire

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.00%)

6. Segments

Consumer Finance

Expected Growth: 10.0%

Nicholas Financial, Inc.'s 10.0% growth in Consumer Finance is driven by increasing demand for personal loans, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digital lending platforms and cost-effective operations have improved efficiency and reduced costs, contributing to the segment's growth.

7. Detailed Products

Consumer Loans

Nicholas Financial, Inc. offers consumer loans to individuals for various personal and financial needs.

Dealer Financing

The company provides financing options to dealerships for purchasing vehicles, allowing them to manage their inventory and cash flow.

Retail Financing

Nicholas Financial, Inc. offers financing options to retailers, enabling them to provide financing options to their customers.

Portfolio Acquisitions

The company acquires and manages portfolios of loans and leases from other financial institutions and companies.

8. Nicholas Financial, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Nicholas Financial, Inc. is medium due to the presence of alternative financial institutions and online lending platforms that offer similar services.

Bargaining Power Of Customers

The bargaining power of customers is low due to the specialized nature of Nicholas Financial, Inc.'s services, which limits the ability of customers to negotiate prices.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the presence of multiple suppliers of financial services and technology, which gives Nicholas Financial, Inc. some negotiating power.

Threat Of New Entrants

The threat of new entrants is high due to the relatively low barriers to entry in the financial services industry, which makes it easier for new companies to enter the market.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of multiple competitors in the financial services industry, which leads to intense competition for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	26.73%
Debt Cost	8.37%
Equity Weight	73.27%
Equity Cost	8.37%
WACC	8.37%
Leverage	36.48%

11. Quality Control: Nicholas Financial, Inc. passed 3 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Atlanticus

A-Score: 5.7/10

Value: 7.5

Growth: 8.6

Quality: 5.8

Yield: 0.0

Momentum: 8.5

Volatility: 3.7

1-Year Total Return ->

NerdWallet

A-Score: 4.5/10

Value: 5.2

Growth: 7.1

Quality: 7.6

Yield: 0.0

Momentum: 3.5

Volatility: 3.3

1-Year Total Return ->

LendingClub

A-Score: 4.4/10

Value: 6.6

Growth: 3.9

Quality: 6.6

Yield: 0.0

Momentum: 6.5

Volatility: 3.0

1-Year Total Return ->

Mill City Ventures III

A-Score: 4.2/10

Value: 1.6

Growth: 5.4

Quality: 8.2

Yield: 0.0

Momentum: 10.0

Volatility: 0.0

1-Year Total Return ->

CPI Card Group

A-Score: 3.8/10

Value: 8.4

Growth: 6.4

Quality: 4.7

Yield: 0.0

Momentum: 1.0

Volatility: 2.3

1-Year Total Return ->

Nicholas Financial

A-Score: 3.3/10

Value: 8.2

Growth: 0.3

Quality: 4.6

Yield: 0.0

Momentum: 5.0

Volatility: 1.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-2.61%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.37%

Nicholas Financial, Inc. - CA65373J2092

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on NICK

1.c. Company Highlights

Lower Growth

Strong Momentum

Lower Yield

Cheaper

Lower Quality

Weak Momentum

Stable Momentum

Medium Volatility

More Volatile

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.00%)

6. Segments

Consumer Finance

Expected Growth: 10.0%

7. Detailed Products

Consumer Loans

Dealer Financing

Retail Financing

Portfolio Acquisitions

8. Nicholas Financial, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Nicholas Financial, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.19$

Current Price

6.19$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA