Q: Could you comment on earnings. Originations seem to be showing strong growth, but ECN also "tightened" their guidance. This confuses me? Do you see ECN as a good investment over the next 3 years?
5i Research Answer:
Revenue of $60 mln missed estimates of $64 mln while EPS of $0.04 missed estiamtes of $0.05. The RVM business seems to have led to the guidance downgrade even though originations were solid. The company is expecting strong earnings growth going forward though and at 9X forward earnings, with the quarter now behind them, we think it looks interesting here. The big caveat here is that the economic backdrop is not overly supportive of the business so some patience is likely required.