Value
7.7/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 4.4 |
| P/S | 9.2 |
| EV/EBITDA | 2.9 |
| Fwd P/E | 8.2 |
| PEG | 10.0 |
- ▸Forward P/E: 14.3x
- ▸PEG: 0.14
- ▸Attractively valued
WRLD · Why this verdict
Why World Acceptance (WRLD) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
World Acceptance trades attractively valued with a forward P/E of 14.7x and a PEG ratio of 0.14, suggesting cheap pricing relative to its growth. Valuation breakdown | Forward P/E should stay below 16x and PEG should remain under 0.5 over the next 12 months if the valuation gap persists. | →Stable |
| CounterA very low PEG for a consumer lender can reflect the market correctly pricing in credit-quality risk rather than a genuine mispricing. | ||
The engine flags an earnings-quality red flag with free cash flow at only 43% of net income and a failed Rule of 40 score of 10, signaling weak cash conversion. Quality breakdown | The FCF-to-net-income ratio should rise toward 70% or higher over the next 12 months if earnings quality is improving. | →Stable |
| CounterConsumer lenders often show volatile FCF-to-NI ratios tied to loan-book growth timing rather than genuine earnings-quality deterioration. | ||
World Acceptance has missed consensus EPS estimates in all of the last 4 reported quarters, an unbroken execution shortfall against expectations. Earnings | The company should beat or meet estimates in at least 2 of the next 4 quarters if execution is stabilizing. | →Stable |
| CounterA thinly-covered consumer lender can show a persistent miss streak simply because analyst models lag a fast-changing credit environment, not because the business is deteriorating. | ||
The stock has already run well past its analyst price target, leaving the engine's V8 check showing negative implied upside. Warnings | The stock's upside to analyst target should stay within a reasonable range (above -10%) over the next 12 months if the price and target realign. | →Stable |
| CounterAnalyst targets can lag a re-rating and simply need time to catch up rather than signal the stock is overextended. | ||
Insiders have been net sellers over the last 90 days, contributing to the engine's bearish insider signal. Insider | Insider transactions should turn net neutral or positive over the next 90 days if the selling was routine rather than a bearish signal. | →Stable |
| CounterModest insider selling at 0.035% of market cap can reflect routine diversification or tax planning rather than a negative view of the business. | ||
World Acceptance trades attractively valued with a forward P/E of 14.7x and a PEG ratio of 0.14, suggesting cheap pricing relative to its growth.
→StableValuation breakdown
- Expectation
- Forward P/E should stay below 16x and PEG should remain under 0.5 over the next 12 months if the valuation gap persists.
CounterA very low PEG for a consumer lender can reflect the market correctly pricing in credit-quality risk rather than a genuine mispricing.
The engine flags an earnings-quality red flag with free cash flow at only 43% of net income and a failed Rule of 40 score of 10, signaling weak cash conversion.
→StableQuality breakdown
- Expectation
- The FCF-to-net-income ratio should rise toward 70% or higher over the next 12 months if earnings quality is improving.
CounterConsumer lenders often show volatile FCF-to-NI ratios tied to loan-book growth timing rather than genuine earnings-quality deterioration.
World Acceptance has missed consensus EPS estimates in all of the last 4 reported quarters, an unbroken execution shortfall against expectations.
→StableEarnings
- Expectation
- The company should beat or meet estimates in at least 2 of the next 4 quarters if execution is stabilizing.
CounterA thinly-covered consumer lender can show a persistent miss streak simply because analyst models lag a fast-changing credit environment, not because the business is deteriorating.
The stock has already run well past its analyst price target, leaving the engine's V8 check showing negative implied upside.
→StableWarnings
- Expectation
- The stock's upside to analyst target should stay within a reasonable range (above -10%) over the next 12 months if the price and target realign.
CounterAnalyst targets can lag a re-rating and simply need time to catch up rather than signal the stock is overextended.
Insiders have been net sellers over the last 90 days, contributing to the engine's bearish insider signal.
→StableInsider
- Expectation
- Insider transactions should turn net neutral or positive over the next 90 days if the selling was routine rather than a bearish signal.
CounterModest insider selling at 0.035% of market cap can reflect routine diversification or tax planning rather than a negative view of the business.
TrendMatrix Research · core thesis
Engine thesis — one sentence
World Acceptance screens as statistically cheap (PEG 0.14) but the cheapness looks earned — a 43% FCF-to-net-income ratio, a failed Rule of 40, four consecutive earnings misses, a price already well above where the analyst target implies, and net insider selling all point to elevated fundamental risk.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.9 |
| ROA | 3.8 |
| Gross margin | 9.5 |
| Op margin | 10.0 |
| Net margin | 3.0 |
| Current ratio | 5.0 |
| FCF quality | 3.4 |
| Moat | 5.8 |
| Rule of 40 | 3.0 |
| Piotroski F | 8.9 |
- ▸Earnings quality RED FLAG: 43% FCF/NI
- ▸Rule of 40: 10 (fail)
- ▸Strong Piotroski F-Score: 8/9
Growth
7.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.3 |
| EPS growth | 10.0 |
Momentum
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 4.9 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 1.6 |
| erm sentiment | 5.0 |
- ▸Below analyst target
Insider
5.5/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 10.0 |
- ▸Modest insider selling — $335,089 (0.036% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.6 |
| quality rank | 2.1 |
| growth rank | 3.6 |
Technical
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.7 |
| support resistance | 5.3 |
| 52w position | 7.1 |
Risk (lower is worse)
4.2/10data confidence 80%| Component | Sub-score |
|---|---|
| days to cover | 7.0 |
| volatility | 0.0 |
| beta | 6.5 |
| debt equity | 3.2 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
- ▸Earnings concerns: 0B/4M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:15d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.0<4.5
- ASYMMETRY:-2.6=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-2.56
Upside
-38.4%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($0.9B) below institutional reach
SuitabilityAggressive — MCap $0.9B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.7) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.0<4.5, ASYMMETRY:-2.6=NEGATIVE) reinforce the read. Current asymmetry R:R is -2.56 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.7, Growth at 7.2, and Technical at 5.7; the weakest are Catalyst at 2.5, Peer rank at 3.8, and Sentiment at 3.9. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -2.56 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Valuation Low Peg
Trip ifPEG ratio rises above 1.0 from the current 0.14, eroding the valuation advantage.
- P2Earnings Quality Red Flag
Trip ifFCF-to-net-income ratio rises above 80% from the current 43%, resolving the earnings-quality red flag.
- P3Four Quarter Earnings Miss Streak
Trip ifThe company beats consensus EPS estimates in at least 2 of the next 4 quarters, breaking the current 0-of-4 streak.
- P4Analyst Target Reached Limited Upside
Trip ifThe stock's upside to analyst target exceeds 15%, reversing the current -42.4% overshoot.
- P5Bearish Insider Selling Signal
Trip ifNet insider buying exceeds $200,000 over the next 90 days, reversing the current bearish selling signal.