FirstCash Holdings Inc.

The stable outlook reflects S&P Global Ratings' expectation that over the next 12 months, FirstCash's debt to EBITDA will remain at 2.0x-3.0x. We could lower the rating if large debt-funded initiatives, weaker-than-expected markets, or adverse regulatory changes hurt the company's credit measures. Specifically, we could lower the rating if debt to EBITDA exceeds and stays above 3.0x because of lower-than-expected profitability or an increase in debt-funded spending. We could raise the rating on FirstCash if leverage, as measured by debt to adjusted EBITDA, falls and stays below 2.0x. We could also raise the rating if the company improves its business and geographic diversity while expanding EBITDA and maintaining its margins. U.S. real GDP growth of 0.7% in 2023 and 1.2%

...FirstCash Holdings Inc. (FirstCash) revenue increased 61% in 2022 on its acquisition of American First Finance Inc. (AFF) and higher pawn segment income. Revenue for 2022 was $2.7 billion versus $1.7 billion in 2021, and adjusted EBITDA grew 40% in 2022 to $528 million from $379 million. We expect revenue and EBITDA to continue growing in 2023 with help from increased demand for pawn loans and origination volumes at AFF. We expect that economic conditions--including inflation, high interest rates, and a potential recession--will continue to support pawn demand. We also expect the company to steadily add new pawn stores in Latin America and the U.S., as well as new merchant partnerships in AFF. We expect that leverage will be below 3.0x debt to EBITDA in 2023. FirstCash ended 2022 with leverage of 3.2x. Following strong first-quarter earnings, leverage declined to 2.9x. Over the next 12 months, we expect debt to EBITDA of 2.0x-3.0x and EBITDA interest coverage of 6.0x-8.0x....

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