Bullish Seeking Alpha Article Clashes with DeepValue's Cautious EZCORP Stance

What happened

A Seeking Alpha article published on February 19, 2026, rates EZCORP as a Buy with a FY28 price target of $45–$75, citing growth at a reasonable price driven by diluted EPS surging to $1.42 in FY25 and a conservative DCF intrinsic value of $26.38. This optimistic view sharply contrasts with the DeepValue master report's WAIT rating, which highlights significant risks including higher interest expenses from 7.375% notes and rising wage inflation in Latin America. The article emphasizes record revenues and operational leverage pushing EBITDA margins to 15%, suggesting an 8.5% margin of safety over the current $24.31 share price. However, DeepValue notes that EZCORP has already rerated 77% in twelve months to $21.46, trading at 11.9x TTM EPS, with forward returns potentially limited by cost pressures and slowing inventory turns. This divergence underscores the ongoing debate over whether EZCORP can sustain mid-teens growth while managing escalating operational headwinds.

Implication

The Seeking Alpha article's aggressive price target relies on forward-looking assumptions that may overlook near-term pressures from interest costs and wage inflation, as highlighted in the DeepValue report. DeepValue's analysis indicates the stock is fairly valued after its recent run-up, with upside constrained unless EZCORP delivers sustained double-digit pawn loan growth and expense control. Key risks include decelerating same-store PLO growth below 5%, merchandise margin compression, and regulatory scrutiny similar to peers like FirstCash. Investors should closely monitor upcoming quarterly reports for signs of operational leverage and inventory management, particularly in Latin America. A pullback to the $17–$20 range, aligning with DeepValue's attractive entry level, would offer a better risk-reward opportunity than chasing current prices.

Thesis delta

The new article does not materially shift the DeepValue thesis, which remains cautious due to unresolved cost pressures and valuation concerns after the stock's significant rerating. However, it highlights growing market optimism that could provide short-term support if EZCORP continues to beat earnings expectations, but investors should not be swayed without concrete evidence of margin resilience against higher interest and wage expenses.