(CPSS) Consumer Portfolio - Ratings and Ratios

Consumer Portfolio Services, Inc. is a niche finance company in the US that specializes in providing indirect financing to customers with limited credit histories or past credit problems through the purchase and servicing of retail automobile contracts. By doing so, it enables dealers to facilitate sales that might not have been possible through traditional financing channels, such as commercial banks and credit unions.

The companys business model is centered around acquiring and servicing automobile contracts from franchised and select independent automobile dealers. This not only provides an alternative source of financing for these dealers but also allows them to expand their customer base. Additionally, CPSS engages in strategic merger and acquisition transactions to acquire installment purchase contracts, further diversifying its portfolio.

With operations spanning across multiple states, including California, Nevada, Virginia, Florida, and Illinois, CPSS has established a significant presence in the US consumer finance market. Its headquarters in Las Vegas, Nevada, serves as the hub for its operations, which have been ongoing since its incorporation in 1991.

Analyzing the technical data, CPSSs stock price is currently at $9.65, indicating a potential buy signal given its position relative to its SMA20 and SMA50. The stocks ATR of 0.61, translating to a 6.35% volatility, suggests moderate price movements. Considering its 52-week high and low of $12.44 and $7.61, respectively, the stock has shown resilience. With the SMA200 at $9.80, slightly above the current price, a bullish trend could be anticipated if the stock price surpasses this level.

From a fundamental perspective, CPSS has a market capitalization of $200.49M USD and a P/E ratio of 11.84, suggesting a relatively stable valuation. The forward P/E of 5.17 indicates expected growth in earnings, potentially driven by the companys strategic expansion and portfolio management. With a Return on Equity (RoE) of 6.75%, CPSS demonstrates a decent ability to generate profits from shareholders equity.

Forecasting CPSSs future performance, if the company continues to effectively manage its portfolio and expand its operations, it could see an increase in its stock price. Given the current technical indicators and fundamental data, a potential target price could be around $11.50 in the next 6-12 months, representing a 19% increase from the current price. This projection is contingent on the company maintaining its RoE and continuing to grow its earnings, thereby justifying its forward P/E ratio.