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ECN Capital Corp. (TSE:ECN)
TSX:ECN
Top Page
ECN Capital
(TSX:ECN)
54Neutral
Positive Factors
Future Growth Guidance
Despite challenges, ECN maintains its 2025 guidance for significant growth in originations and operating income.
Sales Network Expansion
ECN's Marine and RV segment showed significant year-over-year growth in originations, aided by sales network expansion.
Negative Factors
Earnings Performance
Q4/24 adjusted EPS missed consensus and guidance expectations, largely due to deferred originations.
Financial Performance Challenges
The Marine and RV segment had a significant increase in originations, but pre-tax operating income was well below expectations due to deferred sales and high costs.
Leadership and Strategy Changes
There are uncertainties in guidance and execution due to leadership and strategy changes at Triad, which may impact future performance.
ECN Capital (ECN) vs. S&P 500 (SPY)
Market Cap
C$716.91M
Dividend Yield1.57%
Average Volume (3M)182.54K
Price to Earnings (P/E)―
Beta (1Y)1.31
Revenue Growth49.43%
EPS Growth99.91%
CountryCA
Employees690
SectorFinancial
Sector Strength80
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)0.00
Shares Outstanding281,142,640
10 Day Avg. Volume132,502
30 Day Avg. Volume182,542
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.41
Price to Cash Flow (P/CF)3.30
P/FCF Ratio4.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$3.50Price Target Upside34.10% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
ECN Capital Business Overview & Revenue Model
Company DescriptionECN Capital is a leading financial services company based in Canada, specializing in asset management and advisory services. The firm operates primarily within the financial services sector, focusing on providing businesses with strategic capital solutions. ECN Capital offers a range of products and services, including asset-backed lending, equipment financing, and vendor finance programs, catering primarily to businesses in North America.
How the Company Makes MoneyECN Capital generates revenue through various streams, primarily by offering financial products and services to businesses. The company earns money through interest income from loans and leases, fees associated with asset management and advisory services, and income from vendor finance programs. Additionally, ECN Capital may engage in partnerships with other financial institutions to enhance its service offerings and expand its market reach, contributing to its earnings. The firm leverages its expertise in asset-backed lending and equipment financing to maintain a steady flow of income, while also benefiting from strategic advisory fees.
ECN Capital Financial Statement Overview
Summary
ECN Capital demonstrates signs of recovery with improved revenue and profitability in 2024. The income statement shows inconsistencies and operational challenges, and the balance sheet reveals high leverage. The cash flow indicates recovery, but historical volatility raises concerns about sustainability.Income Statement
ECN Capital has shown significant volatility in its income statement over the years. While there was an improvement in revenue to $220.76M in 2024, the firm struggled with negative gross profit in 2023 and fluctuating EBIT and EBITDA margins. The recent improvement in net income from a substantial loss in 2023 to a profit in 2024 is a positive indicator, but historical inconsistencies suggest caution. The gross profit margin for 2024 is 39.93%, showing recovery, yet EBIT margin was negative in previous periods, indicating operational challenges.60
Neutral
Balance Sheet
The company's balance sheet reflects a high level of debt with a debt-to-equity ratio of 2.85 in 2024, indicating significant leverage. This presents both risk and potential for financial strain. However, the equity ratio has slightly improved, suggesting some stability with an equity of $207.48M against total assets. The ongoing decrease in stockholders' equity over the years is a concern, but total liabilities have been managed relative to assets.55
Neutral
Cash Flow
ECN Capital's cash flow statement indicates strong recovery in 2024 with operating cash flow rebounding to $180.86M from negative figures in recent years. Free cash flow has also turned positive, reflecting improved financial health. The operating cash flow to net income ratio suggests robust cash generation relative to profits, but historical volatility in free cash flow raises concerns about sustainability.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 220.76M | 79.48M | 196.67M | 215.37M | 266.72M | Gross Profit |
| 88.15M | -62.72M | 90.81M | 120.77M | 167.44M | EBIT |
| 0.00 | -45.07M | 31.08M | 19.38M | 75.28M | EBITDA |
| 32.19M | -40.84M | 44.03M | -9.94M | 22.68M | Net Income Common Stockholders |
| 7.63M | -106.78M | 6.72M | 4.97M | 15.82M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 15.46M | 23.24M | 12.71M | 45.04M | 37.98M | Total Assets |
| 937.15M | 1.28B | 1.42B | 1.15B | 1.71B | Total Debt |
| 590.94M | 917.70M | 1.01B | 274.60M | 531.79M | Net Debt |
| 575.48M | 894.46M | 995.28M | 229.56M | 493.81M | Total Liabilities |
| 726.25M | 1.08B | 1.22B | 927.49M | 883.64M | Stockholders Equity |
| 207.48M | 209.49M | 193.68M | 218.63M | 822.56M |
| Cash Flow | Free Cash Flow | |||
| 179.73M | -45.44M | -912.20M | 131.76M | -80.27M | Operating Cash Flow |
| 180.86M | -26.03M | -869.27M | 139.73M | -77.61M | Investing Cash Flow |
| 147.75M | 43.38M | 116.25M | -79.83M | -3.19M | Financing Cash Flow |
| -334.89M | -6.79M | 721.07M | -1.83B | 35.14M |
ECN Capital Technical Analysis
Negative
2.61
Price Trends
3.05
Negative
3.02
Negative
2.52
Positive
Market Momentum
-0.14
Positive
29.91
Positive
19.61
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ECN, the sentiment is Negative. The current price of 2.61 is below the 20-day moving average (MA) of 2.75, below the 50-day MA of 3.05, and above the 200-day MA of 2.52, indicating a neutral trend. The MACD of -0.14 indicates Positive momentum. The RSI at 29.91 is Positive, neither overbought nor oversold. The STOCH value of 19.61 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:ECN.
ECN Capital Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $2.55B | 9.43 | 25.28% | 3.26% | 21.86% | 12.85% | |
63 Neutral | $14.39B | 9.81 | 8.95% | 4.37% | 16.38% | -11.64% | |
56 Neutral | C$2.31B | 11.59 | 27.56% | 6.36% | 16.99% | -19.87% | |
54 Neutral | C$716.91M | ― | 3.65% | 1.57% | 49.43% | 99.91% | |
53 Neutral | $1.20B | ― | -0.24% | 7.27% | -3.68% | -111.41% |
* Financial Sector Average
Performance Comparison
TSE:ECN
ECN Capital
2.61
0.66
33.85%
TSE:GSY
goeasy
158.30
3.84
2.49%
TSE:LB
Laurentian Bank
26.48
0.68
2.66%
TSE:FN
First National Financial
39.00
4.17
11.97%
ECN Capital Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -21.62% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with significant achievements in RV & Marine segment growth and debt reduction, but was overshadowed by the impact of severe weather on originations and deferred asset sales. Despite these challenges, the company remains optimistic about its growth prospects in 2025.Highlights
Record RV & Marine Originations
Originations reached $199 million, marking a 54% year-over-year increase, and the creation of a securitization vehicle promises further growth and profitability in 2025.
Significant Deleveraging
The company achieved a $325 million reduction in debt, significantly deleveraging the balance sheet.
Manufactured Housing Operating Income Surge
Fourth quarter operating income for Manufactured Housing was $17.2 million, $16.8 million higher than the previous quarter.
Strong Credit Performance
Credit performance remained robust with delinquencies within expectations and managed assets continuing to grow.
Lowlights
Impact of Severe Weather on Originations
Unprecedented severe weather, including the third worst hurricane in U.S. history, deferred $50 million to $75 million of Triad's originations into the first half of 2025.
Deferred RV & Marine Asset Sales
Approximately $75 million in RV & Marine asset sales were deferred into the first quarter of 2025, impacting Q4 2024 earnings.
Variability in Origination Revenue Margin
Origination revenue margin showed significant variability due to product and funding mix, with some compression in Q4 related to interest rate volatility.
Company Guidance
During the ECN Capital Fourth Quarter 2024 Results Conference Call, the guidance provided for 2025 included several key financial metrics and strategic goals. The company anticipates a notable increase in originations, with expectations set at $1.7 billion to $1.9 billion for the Manufactured Housing segment and $1.2 billion to $1.4 billion for the RV and Marine segment. The origination revenue yield for Manufactured Housing is projected to be 6.5%, and the RV and Marine segment aims to achieve total revenue between $54 million and $66 million. ECN Capital also plans to reduce its finance assets to a range of $400 million to $600 million and maintain total debt between $500 million and $700 million. They are targeting an adjusted EPS of $0.19 to $0.25 for 2025. The company highlighted significant improvements in operational efficiencies, particularly in its loan origination systems and dealer portal, which are expected to contribute to strong financial performance in the coming year.ECN Capital Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
ECN Capital Closes Additional C$8 Million Debenture Offering
Positive
Apr 1, 2025
ECN Capital Corp. announced the closing of an additional C$8 million offering of 6.50% convertible senior unsecured debentures, following the exercise of an over-allotment option by a syndicate of underwriters. This brings the total gross proceeds from the offering to C$83 million, which will support the company’s operations and potentially enhance its market position by providing high-quality assets to its partners.
Delistings and Listing ChangesPrivate Placements and Financing
ECN Capital Closes C$75 Million Debenture Offering
Positive
Mar 19, 2025
ECN Capital Corp. has successfully closed a C$75 million offering of 6.50% convertible senior unsecured debentures due in 2030. The proceeds from this offering will be used to redeem the company’s outstanding 6.00% senior unsecured debentures due December 2025. This strategic move is expected to streamline ECN Capital’s financial obligations and potentially enhance its market position by reducing debt costs. The new debentures will trade on the Toronto Stock Exchange, and the redemption of the older debentures will lead to their delisting.
Private Placements and FinancingBusiness Operations and Strategy
ECN Capital Announces C$75 Million Convertible Debenture Offering
Neutral
Mar 12, 2025
ECN Capital Corp. has announced a C$75 million bought deal offering of 6.50% listed convertible senior unsecured debentures, set to mature on April 30, 2030. The proceeds from this offering are intended to redeem existing senior unsecured debentures due December 31, 2025, subject to lender approval, and may also be used to manage existing indebtedness. This move is part of ECN Capital’s strategic financial management to optimize its debt structure, potentially impacting its market positioning and stakeholder interests.
DividendsBusiness Operations and StrategyFinancial Disclosures
ECN Capital Reports Strong Q4 2024 Results, Declares Dividends
Positive
Feb 27, 2025
ECN Capital reported a solid performance for Q4 2024, with an adjusted net income of $0.02 per share, reflecting a significant improvement from the previous year’s loss. Despite challenges such as severe weather disruptions, the company completed its turnaround, enhancing operations and profitability. The Manufactured Housing segment remains a key focus, contributing significantly to originations, while the RV and Marine segments continue to gain market share. The company declared dividends for both common and preferred shareholders, indicating a stable financial position.
Financial Disclosures
ECN Capital to Release Q4 2024 Financial Results
Neutral
Feb 18, 2025
ECN Capital Corp. has announced it will release its financial results for Q4 and the full year ending December 31, 2024, on February 27, 2025. An analyst briefing will be held the same day to discuss these results. This announcement provides insights into the company’s financial performance and may impact its market positioning by influencing stakeholder confidence and investment decisions.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.