Enova: Growing 33% Without A Bank, Still Trades At 10x Earnings (Buy)
Enova remains a Buy after Q3'26 results, with shares undervalued at $173 versus a fair value of $190–$210. ENVA delivered 33% adjusted EPS growth, 26% revenue growth, and a lower net charge-off ratio, highlighting strong execution and business loan focus.
Intelligence analysis by Qwen 2.5 (3B)
Enova stock is undervalued and a Buy, with strong execution and business loan focus highlighted in Q3'26 results.
Enova is a company that gives out loans. They've been doing really well, growing their earnings and revenue by 33% and 26% respectively. They're also keeping their mistakes low. But they're going to buy back some of their own stock and make new products. But they might have some problems like people not paying back their loans on time or spending too much money on marketing.
Analysis
Management's Strategy Shift
Management has shifted to accelerating buybacks and new product development after the Grasshopper acquisition fell through, signaling confidence in intrinsic value.
Key Risks
Rising 30-day delinquencies and elevated marketing spend pose risks to the company's performance.
Robust Loan Origination
Robust loan origination supports the bullish thesis.
Key points
- Enova delivered 33% adjusted EPS growth and 26% revenue growth in Q3'26
- Management is shifting focus to buybacks and new product development
- Key risks include rising 30-day delinquencies and elevated marketing spend
If Enova can keep their mistakes low and continue to grow their business, they could become even more successful.
If Enova can't keep their mistakes low or if people start not paying back their loans, they might have problems.
