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  5. EFN: Thoughts on Elements earnings. [Element Fleet Management Corp.]
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Q: Thoughts on Elements earnings. They are guiding for between 8.7-9% fcf yield based on yesterdays close. For a steady eddy company this seems like an excellent bargain. What are your thoughts?
Asked by James on May 12, 2023
5i Research Answer:

EPS of $0.31 beat estimates of $0.27 and revenues of $303.96M beat estimates of $282.22M. Net revenue grew by 16.5% for the quarter and it generated $0.37 of free cash flow per share for the quarter. Its capital-light business model expanded its ROE to 12.0%, and management raised its full-year 2023 guidance for net revenue, operating margin, adjusted operating income, adjusted EPS, free cash flow per share, and originations. It pays a yield close to 2%, has demonstrated strong margin expansion, forward estimates for growth are good, and it trades at a reasonable valuation. It does have a high net debt balance of $9.4B, but these were strong results and the market has reacted positively so far. We would consider the stock buyable at this time while being mindful of position sizing and the company's balance sheet risks.