Value
8.6/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 7.4 |
| P/S | 9.4 |
| EV/EBITDA | 4.7 |
| Fwd P/E | 9.1 |
| PEG | 10.0 |
- ▸Forward P/E: 11.5x
- ▸PEG: 0.24
- ▸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. How we score · Editorial policy
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VerdictSELL
Overall score6.0/10
ConfidenceMEDIUM
MacroRISK_OFF
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.
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. | ↑Improving |
| 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. | ↑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. Earnings | The company should beat or meet estimates in at least 2 of the next 4 quarters if execution is stabilizing. | ↑Improving |
| 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. | ↓Deteriorating |
| 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.
↑ImprovingValuation 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.
↑ImprovingQuality 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.
↑ImprovingEarnings
- 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.
↓DeterioratingWarnings
- 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.
Per-dimension breakdown
Quality
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.6 |
| ROA | 4.3 |
| Gross margin | 10.0 |
| Op margin | 6.7 |
| Net margin | 4.2 |
| Current ratio | 5.0 |
| Moat | 5.8 |
| Piotroski F | 8.9 |
- ▸Strong Piotroski F-Score: 8/9
Growth
6.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.4 |
| EPS growth | 10.0 |
Momentum
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.2 |
| Analyst rating | 5.0 |
| Price target | 5.3 |
Insider
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Heavy insider selling — $25,638,954 (3.159% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.5 |
| quality rank | 2.8 |
| growth rank | 2.4 |
Technical
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.8 |
| support resistance | 3.2 |
| 52w position | 5.5 |
| gap | 5.0 |
Risk (lower is worse)
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.0 |
| days to cover | 3.9 |
| volatility | 4.3 |
| beta | 6.3 |
| debt equity | 3.2 |
| news risk | 5.5 |
- ▸High short interest: 100%
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 7.0 |
- ▸Earnings concerns: 2B/2M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier -1 (HOLD_IF_HOLDING → SELL_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=-1Passed (4)
- MOMENTUM:6.5>=5.5
- EARNINGS_PROXIMITY:89d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-1.5=NEGATIVE
- INSIDER:3.16%=EXTREME
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.51
Upside
-13.3%
Downside
8.8%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($0.8B) below institutional reach
SuitabilityAggressive — MCap $0.8B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.5>=5.5. Top dim: Value at 8.6; weakest: Risk (lower is worse) at 3.9. No conviction either direction.
The strongest dimensions are Value at 8.6, Growth at 6.7, and Momentum at 6.5; the weakest are Risk (lower is worse) at 3.9, Technical at 4.1, and Peer rank at 4.1. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -1.51 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.