Zacks slashes target price for financial small cap CPS by almost 17%

Zacks Small-Cap Research (Zacks SCR) has slashed its target price for Consumer Portfolio Services (CPS), a smaller specialty finance company operating in the auto loan market, by almost 17% after it posted disappointing first-quarter financials: EPS missed Zacks’ expectations by a third.

Zacks SCR values CPS at $15 per share, almost 17% below its previous target price of $18 per share but still above current quotes. Yesterday, May 13, CPS closed at $9.65 per share. This means Zacks SCR sees upside of more than 55% in the stock.

Zacks revised downward its target price after CPS released first-quarter financials. Earnings per share came in at $0.19, flat compared to the same quarter in 2024 but almost 37% below Zacks SCR’s estimate. Meanwhile, revenue rose 16.6% year over year to $106.9 million. New contract purchases from dealers also grew 30% to $451.22 million, which marked the best first-quarter result in the company’s history, according to CEO Charles E. Bradley, as quoted in the press release. Overall, however, Zacks SCR deemed the results disappointing.

Thus, it lowered its annual EPS estimate for the company by nearly 35% to $1.17 for 2025 and by 15% to $2.45 for 2026. “That said, we note our 2026 EPS estimate represents 109% year-over-year growth, as revenue growth accelerates and operating leverage builds,” Zacks SCR pointed out.

At the end of last week, 87% of the companies from the S&P SmallCap 600 had already posted their first-quarter financial results, according to Freedom Broker. The overall performance was said to be disappointing. Among the companies that have reported so far, the combined EPS fell 9.2% year over year, whereas the consensus forecast had been for an increase of 2.4%.