EZCORP: A Cash-Generating Fortress in Tariff Turbulence

The economy is bracing for a tariff-driven slowdown, and investors are scrambling to find companies that thrive when the going gets tough. Enter EZCORP (NASDAQ: EZPW), a pawn services giant with a business model built for volatility. Let me break down why this stock is a hidden gem in a rocky market—and why it's time to buy before the crowd catches on.

Q1 2025: Proof of Fireproof Resilience

EZCORP just delivered a Q1 earnings report that screams “counter-cyclical winner.” Revenue surged 10% year-over-year to $329.7 million, while Pawn Loans Outstanding (PLO) jumped 16% to $282.9 million. EBITDA popped 12% to $53 million, and diluted EPS soared 17% to $0.42. These aren't just numbers—they're a battle cry for investors. When the economy slows, EZCORP's pawn shops become lifelines for cash-strapped consumers, driving loan demand and merchandise sales.

But here's the kicker: EZCORP is doing this while expanding. It now operates 1,283 stores, with four new locations added in Latin America—a region where its “cash is king” model thrives. Meanwhile, its cash reserves swelled to $174.5 million, giving it a war chest to weather tariffs or inflation.

Why Tariffs Can't Sink This Ship

Tariffs and trade wars create a perfect storm for EZCORP. When companies hike prices due to tariffs, consumers tighten their belts—exactly when pawn shops see higher loan demand. The company's Q1 results already hint at this: U.S. revenue rose 7%, while Latin America revenue exploded 18%.

Critics will point to risks like rising wages in Mexico or slower inventory turnover. Fair enough—but here's the flip side: EZCORP's stores are cash flow machines. Its EBITDA margin expanded to 16.1%, and its Easy Plus rewards program now fuels 77% of transactions. That's loyalty you can't tariff away.

Undervalued? Let the Numbers Speak

EZCORP trades at a P/E ratio of 12.3, far below the S&P 500's average of 17.9. Even within its niche, it's a steal. Compare it to rival Pawnshop Holdings (PAWN), which trades at 23.5x earnings. Meanwhile, analysts project 5.7% annual revenue growth over the next two years—a modest target given its 10% Q1 beat—and a price target of $17.17, implying a 4.8% upside from recent levels.

But here's the secret sauce: EZCORP's dividend. It currently yields 2.3%, a modest payout but one that's backed by a fortress balance sheet. This isn't a “high yield” play—it's a “safe cash generator” in a market desperate for both.

Hedge Funds Are Already Buying—Shouldn't You?

Institutional investors are piling in. While the data doesn't explicitly name funds, the stock's 17.17 price target and 4.8% upside suggest smart money is already positioning. Add to that its 13% PLO growth—in a quarter that should've been slow—and you've got a stock primed to outperform when the market “reprices” for recession risks.

The Bottom Line: Buy Now—Before the Slowdown Hits

EZCORP isn't a glamour stock. It's a no-nonsense operator in a gritty, recession-resistant industry. But that's exactly why it's a buy now.

• Buy Below $16.50: Aim for a 10% discount to the $17.17 target.
• Hold for Cash Flow: The dividend alone gives you a floor.
• Watch for Tariff Triggers: If trade tensions escalate, EZPW's stock should rally as its “recession hedge” appeal grows.

This isn't a bet on growth—it's a bet on survival. And in a slowing economy, survival is the ultimate growth strategy.

Action Plan: Add EZPW to your portfolio now. Set a stop-loss at $15.00 and target $18.00 for a 20% gain. If tariffs ignite a market selloff, EZPW won't just hold its ground—it'll profit from the chaos.

Disclosure: The author holds no position in EZCORP at the time of writing.