Colossal Long-Term Growth Potential For Conn's, Says Piper Jaffray Analyst
Piper Jaffray reiterated its Overweight rating for CONN'S, Inc. (NASDAQ: CONN) shares following its recent investor meeting with the company's new CEO Norm Miller, COO Mike Poppe and IR Andy Berger on Thursday. Conn's currently has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.4 million.
Conn's earnings power over the next two years could be very significant.
According to Piper Jaffray's investor note, the company's earning power may increasingly rise should its delinquency rates continue to decline. As a result of the delinquency rates declining, a lower loss provision rate and lower costs of funds could also be present within the next two years.
Despite the company's past two years of volatile performance, investor interest appears to be strongly increasing.
Piper Jaffray noted Conn's as being a unique and differentiated retailer poised for growth. Based on the firm's recent interactions with investors, investors are either new to the story or starting to come back to the name after not paying attention to it for some time. Piper Jaffray believes that Conn's is uniquely positioned for growth in the market for its potential to grow its store base to 500 (from ~100 currently) and its ability to dramatically lower APRs on their installment contracts versus their rent to-own competitors.
Investor interest is being particularly sought out by newer investors to Conn's. Early indicators for the company are pointing to improved credit metrics for the coming 12 months. Conn's operates as a specialty retailer of durable consumer goods and related services in the United States. The company operates through retail and credit segments.
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