The financial services industry is evolving rapidly, driven by the growing adoption of fintech solutions, expanded internet access, and a stronger focus on digital banking. Consumers are increasingly relying on finance apps for budgeting, while businesses are turning to alternative lending options to meet their credit needs.
At the same time, government policies aimed at improving financial inclusion and supporting small businesses are fueling the sector’s growth. With these tailwinds, small-sized lenders like FirstCash Holdings, Inc. (FCFS), Enova International, Inc. (ENVA), and Atlanticus Holdings Corporation (ATLC) are making a significant impact.
The U.S. remains a leader in small business lending, thanks to its well-established financial infrastructure, diverse loan offerings, and supportive government programs. Large and small banks are expanding their loan products to cater to small businesses, including term loans, lines of credit, and equipment financing, further driving demand in this space.
Globally, the small business loans market is projected to reach $7.2 trillion by 2032, growing at a CAGR of 13%. This surge is fueled by favorable policies such as tax incentives and low-interest loan programs, along with the rise of peer-to-peer lending platforms and digital marketplaces that improve access to capital. In addition, fintech innovations like AI, big data, and blockchain are also transforming loan underwriting, risk assessment, and customer service, making lending more efficient and accessible.
The broader financial services market is also on an upward trajectory and is expected to reach $44.93 trillion by 2028. Artificial intelligence is playing a critical role in this expansion, transforming everything from fraud detection and investment strategies to lending and claims processing. With AI in finance expected to grow at a rate of 16.5% by 2030, lenders that integrate cutting-edge technology are set to gain a competitive edge.
Given these encouraging trends, let’s look at the fundamentals of the top three Consumer Financial Services stocks, beginning with number 3.
Stock #3: Enova International, Inc. (ENVA)
ENVA is a technology and analytics company that offers online financial services internationally. It offers installment loans, line of credit accounts, and CSO programs, like arranging loans with independent third-party lenders and assisting in the preparation of loan applications and loan documents.
In terms of the trailing-12-month gross profit margin, ENVA’s 81.80% is 38.8% higher than the 58.96% industry average. Likewise, its 14.80% trailing-12-month Return on Common Equity is 43% higher than the 10.35% industry average.
For the third quarter that ended September 30, 2024, ENVA’s revenue increased 25.1% year-over-year to $689.92 million. The company’s income from operations of $153.71 million indicates growth of 48.2% from the prior-year quarter. Also, its adjusted earnings were $67.92 million or $2.45 per share, up 41.5% and 63.3% year-over-year, respectively. In addition, the company’s adjusted EBITDA grew 42.3% from the year-ago value to $171.87 million.
Analysts expect ENVA’s revenue and EPS for the fourth quarter (ended December 31, 2024) to increase 25.1% and 23.8% year-over-year to $730.04 million and $2.27, respectively. Moreover, the company surpassed the consensus EPS estimates in each of the trailing four quarters, which is promising.
ENVA’s stock has surged 106.4% over the past year and 17.2% year-to-date to close the last trading session at $112.32.
ENVA’s solid outlook is reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
It has a B grade for Growth and Momentum. Among 48 stocks in the Consumer Financial Services industry, ENVA is ranked #16. Click here to access additional ratings of ENVA (Value, Stability, Sentiment, and Quality)
Stock #2: FirstCash Holdings, Inc. (FCFS)
FCFS and its subsidiaries operate retail pawn stores in the United States, Mexico, and the rest of Latin America. The company operates in three segments: U.S. Pawn, Latin America Pawn, and Retail POS Payment Solutions segments.
On January 30, 2025, buoyed by the strong financials, the company’s board of directors declared a quarterly dividend of $0.38 per share, which will be paid to its shareholders on February 28, 2025.
With 5 years of consecutive dividend growth, FCFS pays a $1.52 per share dividend annually, which translates to a 1.39% yield on the current price. Its dividend payouts have grown at a 7.7% CAGR over the past three years, while its four-year average dividend yield is 1.42%.
FCFS’ trailing-12-month gross profit margin and ROTC of 60.88% and 7.02% are 3.3% and 4.4% higher than their respective industry averages of 58.96% and 6.72%. Likewise, its 12.78% trailing-12-month ROCE exceeds the 10.35% industry average by 23.5%.
During the fourth quarter that ended December 31, 2024, FCFS’ revenue increased 3.7% year-over-year to $883.81 million. Its income before taxes grew 19.7% from the year-ago value to $109.53 million. The company’s adjusted net income and EPS amounted to $95.42 million and $2.12, reflecting an increase of 2.8% and 3.9% year-over-year, respectively. In addition, its adjusted free cash flows came in at $130.56 million, up 51.9% from the prior year’s quarter.
The consensus revenue estimate of $837.11 million for the fiscal first quarter (ending March 2025) indicates a marginal growth from the prior year. Meanwhile, the consensus EPS estimate of $1.77 for the current quarter reflects a 14.1% year-over-year increase. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of the trailing four quarters.
Over the past three months, the stock has gained 5.5%, closing the last trading session at $109.15.
FCFS’ strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, equating to a Buy in our proprietary rating system.
It also has a B grade for Momentum and Stability. Within the same industry, it is ranked #5 out of 48 stocks. To see FCFS’ Growth, Value, Sentiment, and Quality ratings, click here.
Stock #1: Atlanticus Holdings Corporation (ATLC)
ATLC is a financial technology company that provides credit and related financial services and products to customers. It operates in two segments: Credit as a Service and Auto Finance.
In terms of the trailing 12-month gross profit margin, ATLC’s 70.81% is 20.2% higher than the industry average of 58.91%. Likewise, its trailing 12-month net income margin and Return on Common Equity of 28.41% and 19.42% are 27.1% and 89.1% higher than the industry averages of 22.35% and 10.27%, respectively.
During the third quarter ended September 30, 2024, ATLC’s total revenue increased 19.1% year-over-year to $351.22 million. Its net margin rose 13.7% compared to the prior-year quarter, reaching $100.36 million. Additionally, the company’s net income attributable to common shareholders came in at $23.23 million and $1.27 per share, indicating an increase of 22.9% and 23.3% year-over-year, respectively.
Street expects ATLC’s EPS and revenue for the fourth quarter (ended December 2024) to increase 14.5% and 15.1% year-over-year to $1.27 and $355.02 million, respectively. Further, the company has surpassed the consensus EPS estimates in all of the trailing four quarters.
Shares of ATLC have gained 124.8% over the past nine months to close the last trading session at $59.47.
It is no surprise that ATLC has an overall rating of A, which equates to a Strong Buy in our POWR Ratings system. It also has a B grade for Momentum, Sentiment, and Quality. Out of 48 stocks in the Consumer Financial Services industry, it is ranked #2.
In addition to the POWR Rating grades I’ve just highlighted, you can see ATLC’s Growth, Value, and Stability ratings here.
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FCFS shares fell $2.15 (-1.97%) in premarket trading Monday. Year-to-date, FCFS has gained 5.36%, versus a 2.69% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
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