Is June The Month To Buy Elevate Credit Inc (NYSE:ELVT)?

Elevate Credit Inc (NYSE:ELVT) is considered a high growth stock. However its last closing price of $8.14 left investors wondering whether this growth has already been factored into the share price. Let’s look into this by assessing ELVT’s expected growth over the next few years. Check out our latest analysis for Elevate Credit

>Where’s the growth?

Elevate Credit is poised for significantly high earnings growth in the near future. The consensus forecast from 9 analysts is extremely bullish with earnings per share estimated to surge from current levels of $0.0218 to $1.403 over the next three years. This results in an annual growth rate of 51.84%, on average, which signals a market-beating outlook in the upcoming years.

Is ELVT’s share price justified by its earnings growth?

Elevate Credit is available at price-to-earnings ratio of 372.86x, showing us it is overvalued based on current earnings compared to the consumer finance industry average of 14.58x , and overvalued compared to the US market average ratio of 18.45x .

NYSE:ELVT PE PEG Gauge June 19th 18
NYSE:ELVT PE PEG Gauge June 19th 18

After looking at ELVT’s value based on current earnings, we can see it seems overvalued relative to other companies in the industry. However, since Elevate Credit is a high-growth stock, we must also account for its earnings growth by using calculation called the PEG ratio. A PE ratio of 372.86x and expected year-on-year earnings growth of 51.84% give Elevate Credit a punchy PEG ratio of 7.19x. So, when we include the growth factor in our analysis, Elevate Credit appears somewhat overvalued , based on its fundamentals.

What this means for you:

ELVT’s current overvaluation could signal a potential selling opportunity to reduce your exposure to the stock, or it you’re a potential investor, now may not be the right time to buy. However, basing your investment decision off one metric alone is certainly not sufficient. There are many things I have not taken into account in this article and the PEG ratio is very one-dimensional. If you have not done so already, I urge you to complete your research by taking a look at the following:

  1. Financial Health: Is ELVT’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  2. Valuation: What is ELVT worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether ELVT is currently mispriced by the market.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.