The value of the First Cash-Cash America merger was never going to be established in just one quarter, but FirstCash (NASDAQ:FCFS)
does seem to be off to a decent start, and it looks as though the U.S.
business could be stabilizing. Meanwhile, the Latin American business
continues to grow nicely, and the company will soon be taking its first
steps into South America.
I'm still concerned
that the U.S. market isn't going to offer much long-term growth, but I
do believe FirstCash can achieve worthwhile operating synergies from the
merger and use the relatively rich cash flow streams to fund growth
initiatives in markets more promising for growth. I'm adjusting my model
slightly to account for the third quarter and management's guidance,
and my fair value of $55 still offers worthwhile upside if I'm right
that the U.S. business will chip in low growth and good cash flow, while
the Latin American business continues to grow nicely.
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A Respectable Start For The New FirstCash
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