World Acceptance Corporation Common Stock (WRLD)

FairStock Score: 41/100 — MIXED

Key Financials

Strengths

• Generates $16 million in annual free cash flow (2.1% yield on market cap)
• Solid return on equity of 11.0% above cost of capital

Concerns

• High leverage at 2.14x debt-to-equity increases financial risk and interest expense burden
• Currently unprofitable—sustained losses could lead to dilutive capital raises or balance sheet deterioration
• Altman Z-Score of 0.8 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

World Acceptance Corporation Common Stock is a micro-cap financial services company valued at $751 million. Revenue stands at $573 million, though the company is currently unprofitable. From a quality standpoint, World shows distressed Altman Z-Score of 0.8 warrants caution and adequate 11% ROE. On valuation, the stock is reasonably priced at 19.6x earnings, with trades above its Graham Number with a negative 33% margin. Growth dynamics show revenue growing at 0.9% and profit growth of -106.8%. Our composite FairStock Score of 41/100 reflects below-average fundamentals overall. Without profitability, this remains speculative—suitable only for those with high risk tolerance and a long time horizon.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $16 million in annual free cash flow (2.1% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Without a clear path to profitability, continued cash burn forces either dilutive equity raises or debt accumulation that destroys shareholder value. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer