Here's Why This Analyst Sees 'Enormous Long-Term Growth' Potential In CONN

PiperJaffray reiterated its Overweight rating for Conn's, Inc.

shares following its recent investor meeting with the company's new CEO Norm Miller, COO Mike Poppe and IR Andy Berger on Thursday. CONN 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 PiperJaffray'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 Conn's past two years of volatile performance, investor interest appears to be strongly increasing. PiperJaffray noted Conn 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. PiperJaffray believes that CONN is uniquely positioned for growth in the market for its the 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. Early indicators for the company are pointing to improved credit metrics for the coming 12 months. Conn operates as a specialty retailer of durable consumer goods and related services in the United States. The company operates through Retail and Credit segments.