FCFS Stock Rises 30% on Pawn Record Demand and Suggested Guidance

Pawn shops aren’t where most people park their savings, but FirstCash Holdings is NASDAQ: FCFS it could be different. FirstCash is a pawn company, and its stock is growing.

With more than 3,300 stores throughout the United States, Latin America, and the United Kingdom, FirstCash has grown to become one of the largest alternative finance companies for non-primary consumers.

Its first-quarter profit was up 30% year over year, revenue was up 26%, and its shares are up more than a third this year.

It helps that people continue to need these alternative financial methods to manage their budgets. Whether that momentum is sustainable, however, depends on the future wealth of consumers.

Pawn Loans Build a Strong Business Model

A pawnshop business may not be what many investors expect. The pawnshop does not make unsecured loans or check credit scores. A customer brings in an item—typically jewelry, but also electronics, tools, musical instruments, or any other item of value—and receives a short-term loan using the item as collateral. If the customer pays back the loan and the payments, they get their item back. If they don’t, FirstCash keeps the item and sells it. The company makes money in any way.

That model makes the pawn business extraordinarily robust. When the economy is strong, customers pick up their stuff, and FirstCash earns a premium. When the economy weakens, more consumers need cash, the demand for pawn increases, and the company receives fees and more profit by selling more merchandise.

Right now, unfortunately for consumers, is a good time for pawnshops. FirstCash’s pawn receivables, or the amount of outstanding loans secured by collateral, reached a record $851 million at the end of the first quarter, up 70% from last year.

Strong Pawn Demand Fueled First Quarter Results

That helps explain the strong first quarter. Consolidated revenue at FirstCash increased 26%, to $1.05 billion compared to $836 million last year. Net income came in at $108 million, up 29% on a GAAP basis. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 29% to $211 million. Fully diluted earnings per share rose 30% to $2.43 on a GAAP basis and $2.69 on an adjusted basis, beating expectations.

Driving these results was incredibly strong performance in all three pawn segments. Consolidated pawn revenue increased 40% in the first quarter YOY, and total revenue from the pawn segment increased 60% over the same period.

In all, FirstCash finished the first quarter with 3,334 stores, including 1,207 in the US, 1,838 in Latin America, and 289 in the UK Consolidated assets on March 31 reached a record of $5.4 billion, compared to $4.4 billion last year.

All 3 Pawn Segments improve growth

The US pawn segment is its largest business, with revenue of $489 million in the first quarter. And the demand has grown. The company posted 16% revenue growth and pre-tax operating income rose 25%. US same-store pawn receivables grew 19%, the eleventh consecutive quarter of double-digit growth. Pawn loans rose 14% and retail sales grew 13% in the US, with retail margins improving to 44% from 42% last year.

Latin America’s growth was even more impressive. Total segment revenue increased 40% adjusted for US dollars, and pre-tax segment operating income reached a record $51 million, up 62% in dollar terms. Results benefited somewhat from exchange rate fluctuations. On a local currency basis, both revenue and pawn costs grew by 23%.

The UK sector is relatively new but has contributed twice as much as Latin America. FirstCash acquired H&T, the UK’s leading pawnbroker in August 2025. That transaction contributed $102 million to first quarter revenue with a pre-tax operating margin of 39%. Pawn receipts in the UK reached $215 million, an increase of 29% on a same-store local currency basis, compared to receipts a year earlier.

America First Finance Expands Its Reach Beyond Pawnshops

In addition to its footprint, FirstCash also owns American First Finance, which it purchased five years ago, greatly expanding its reach into the buy-now, pay-later and lease sectors. That operation brings in about 20% of the company’s revenue. Today, American First has approximately 16,600 active retail and e-commerce point-of-sale partner locations, up 14% from last year.

In the quarter, the lending unit was the only segment that declined. But the decline was expected as the year-ago period included income from the demise of a previous retail partner. The division posted pretax operating income of $26 million and gross profit fell 11%.

Management Raises Its Outlook for 2026

Given the latest results, FirstCash has raised its full-year revenue guidance for 2026. Pawn operations are expected to account for about 90% of net income and half of pre-tax income for the year, he said. Already in April, same-store pawn receipts were up more than 20% in the US YOY, and retail sales are expected to grow 10% or more. Its Latin American business is expected to grow in the mid to high range. And in the UK, full-year revenue is now expected in the range of $125 million to $135 million, up from prior guidance of $115 million to $125 million.

Analysts continue to view the stock favorably

With FirstCash’s business model and predictions of increased consumer pressure, it’s perhaps no surprise that analysts are generally giving the company a strong buy rating. The stock is already up more than 60% since last year and more than 30% this year alone.

Although the consensus 12-month price target is slightly below current trading levels, five analysts rate the company a Buy, and one lists it as a Hold. The highest price target is $252 per share, while the lowest price is $145. Although not dividend-rich, the company has increased its payout to shareholders for eight consecutive years. It currently pays 42 cents a quarter and spent $50 million in the first quarter on a $150 share repurchase program, buying back shares.

Investors Should Be Mindful Of Several Risks

FirstCash may be a well-managed company in the mysterious landscape of the financial sector, but it is not without its risks. Significant growth has come through acquisitions, which can bring regulatory, cultural, and systemic integration headaches.

Currency risk is also real. The majority of its pawn shops operate in Mexico, and the company estimates that each full-point change in the dollar-to-peso exchange rate affects annual earnings by about 10 to 12 cents per share. A comparable change in the British pound would remove earnings by 7-9 cents.

And FirstCash isn’t a casual value game. With a P/E ratio of over 25, a significant amount is already priced.

But the pawn business has been around for centuries, and it’s not going away. If you are looking for a financial company that makes a profit whether the economy is growing or improving, the three golden balls of the pawn industry may look good in your portfolio.

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