The financial services industry is evolving rapidly, driven by the growing adoption of fintech solutions, expanded internet access, and a stronger focus on digital banking. Consumers are increasingly relying on finance apps for budgeting, while businesses are turning to alternative lending options to meet their credit needs.At the same time, government policies aimed at improving financial inclusion and supporting small businesses are fueling the sector’s growth. With these tailwinds, small-sized lenders like FirstCash Holdings, Inc. (FCFS), Enova International, Inc. (ENVA), and Atlanticus Holdings Corporation (ATLC) are making a significant impact.The U.S. remains a leader in small business lending, thanks to its well-established financial infrastructure, diverse loan offerings, and supportive government programs. Large and small banks are expanding their loan products to cater to small businesses, including term loans, lines of credit, and equipment financing, further driving demand in this space.Globally, the small business loans market is projected to reach $7.2 trillion by 2032, growing at a CAGR of 13%. This surge is fueled by favorable policies such as tax incentives and low-interest loan programs, along with the rise of peer-to-peer lending platforms and digital marketplaces that improve access to capital. In addition, fintech innovations like AI, big data, and blockchain are also transforming loan underwriting, risk assessment, and customer service, making lending more efficient and accessible.The broader financial services market is also on an upward trajectory and is expected to reach $44.93 trillion by 2028. Artificial intelligence is playing a critical role in this expansion, transforming everything from fraud detection and investment strategies to lending and claims processing. With AI in finance expected to grow at a rate of 16.5% by 2030, lenders that integrate cutting-edge technology are set to gain a competitive edge.Given these encouraging trends, let’s look at the fundamentals of the top three Consumer Financial Services stocks, beginning with number 3.Stock #3: Enova International, Inc. (ENVA)ENVA is a technology and analytics company that offers online financial services internationally. It offers installment loans, line of credit accounts, and CSO programs, like arranging loans with independent third-party lenders and assisting in the preparation of loan applications and loan documents.In terms of the trailing-12-month gross profit margin, ENVA’s 81.80% is 38.8% higher than the 58.96% industry average. Likewise, its 14.80% trailing-12-month Return on Common Equity is 43% higher than the 10.35% industry average.For the third quarter that ended September 30, 2024, ENVA’s revenue increased 25.1% year-over-year to $689.92 million. The company’s income from operations of $153.71 million indicates growth of 48.2% from the prior-year quarter. Also, its adjusted earnings were $67.92 million or $2.45 per share, up 41.5% an
Lun. Feb 3rd, 2025
