FirstCash Inc.

The stable outlook reflects S&P Global Ratings' expectation that over the next 12 months, FirstCash's debt to EBITDA will remain 1.75x-2.5x, while the adjusted EBITDA margin will remain stable at close to 22%. We could lower the rating if large debt-funded initiatives, weaker-than-expected markets, or adverse regulatory changes result in deteriorating credit measures. Specifically, we could lower the rating if we expect debt to EBITDA to approach 3.0x because of lower-than-expected profitability or an increase of debt-funded spending. We could also lower the rating if operational issues or the business mix pressure adjusted EBITDA margins, pushing them closer to 15%. We may consider raising the rating if FirstCash is able to reduce its leverage sustainably closer to 1.5x, as measured

...We expect FirstCash Inc.'s leverage to be relatively stable at 1.75x-2.5x debt to EBITDA despite the COVID-19 impact. Leverage for 2019 remained within our expected range despite modestly higher-than-expected debt. The impact of COVID-19 on earnings remains uncertain, though the company reported lower pawn demand offset by higher retail demand. We believe as the impact from the stimulus wanes, pawn demand should be strong, particularly as other small dollar lenders pull back on lending. We expect the company to pull back on shareholder returns. The company has a track record of returning capital to shareholders through share repurchases. We expect the company to suspend share repurchases to preserve cash until conditions normalize....

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