CURO Financial Technologies (CURO) is a financial services company focused on providing financing to subprime borrowers both in-store and online, with operations centered in the United States and Canada. As a result of COVID-19 and the subsequent economic disruptions, the stock has fallen quite a bit from its February highs.
However, loan losses haven’t moved much, as government stimulus helped insulate this consumer base from losses. It is still uncertain if a second round of stimulus is forthcoming. However, given recent guidance from the US government, it seems more likely than not that we will get a second round of stimulus. This will further reduce the credit risk in the portfolio even if the downturn continues.
To be upfront, this is not a historically popular name, with high short interest driven largely by increasing regulatory pressures capping interest rates in states such as California (AB