I was thinking more on this one. Management is more entrepreneurial than most. Like they got out of payday stuff…etc… years ago.
It’s been 6 months, for instance, since that Justin Timberlake stuff happened, so Svr has recycled about one quarter of their loan book, which is good start on that side of NIM.
The problem for near term momentum on NIM is that management has deliberately reduced top line margin also, to go for better clients and different lending pools. That’s a change of business model, which compared to past numbers, is a material change on NIM.
It appears that, while Svr may be 1% of market, they are sacrificing short term gains, to be ‘more things, to more people’ in the longer term.
SVR does have a relatively unique, vertically integrated business model. Some of their guidance in 2023 was about going from 1 billion to 3 billion loan book.
SVR’s model is obviously unproven as a much bigger operation, but it does appear that they are sacrificing near term gains, or at least changing the model, to have a crack at being a more mass lender. Time will tell. Their Q1 release for 2024 displayed a pretty steady operation and looks like loan book growth is slowing.
SVR Price at posting:
$1.30 Sentiment: None Disclosure: Held
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