ECN Capital (ECN) AI Stock Analysis

• Market Cap: C$805.03M
• Dividend Yield: 1.4%
• Average Volume (3M): 140.81K
• Price to Earnings (P/E): 102.1
• Beta (1Y): 1.21
• Revenue Growth: 54.95%
• EPS Growth: N/A
• Country: CA
• Employees: 690
• Sector: Financial
• Sector Strength: 82
• Industry: Financial - Credit Services
• EPS (TTM): 0.04
• Shares Outstanding: 281,479,000
• 10 Day Avg. Volume: 108,205
• 30 Day Avg. Volume: 140,809
• PEG Ratio: 2.22
• Price to Book (P/B): 2.61
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -0.55
• Enterprise Value/Market Cap: 1.60
• Enterprise Value/Revenue: 1.68
• Enterprise Value/Gross Profit: 12.75
• Enterprise Value/Ebitda: 18.66
• 1Y Price Target: C$3.50
• Price Target Upside: 22.38% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 63 Neutral
• Price Target: C$3.00 ▲(4.90%Upside)

ECN Capital's overall stock score is driven by strong cash flow and strategic growth potential highlighted in the earnings call. However, high leverage and valuation concerns weigh on the score, alongside mixed technical indicators.

Positive Factors

Future Guidance

Despite challenges, ECN maintains its 2025 guidance for significant growth in originations and operating income.

Segment Growth

ECN's Marine and RV segment showed significant year-over-year growth in originations, aided by sales network expansion.

Negative Factors

Financial Performance

Q4/24 adjusted EPS missed consensus and guidance expectations, indicating financial performance challenges.

Leadership Uncertainty

There are uncertainties in guidance and execution due to leadership and strategy changes at Triad, which may impact future performance.

ECN Capital Business Overview & Revenue Model

Company Description

ECN Capital Corp. originates, manages, and advises on prime consumer credit portfolios in North America. It operates through Secured Consumer Loans - Triad Financial Services and Source One; and Consumer Credit Card and Related Unsecured Consumer Loans - KG segments. The company provides secured consumer loan portfolios, including manufactured home, marine, and recreational vehicle loans; and consumer credit card portfolios that are focused on co-branded credit cards and related financial products. It serves banks, credit unions, life insurance companies, and pension and investment funds. The company was incorporated in 2016 and is headquartered in Toronto, Canada.

How the Company Makes Money

ECN Capital makes money through a variety of revenue streams centered around its expertise in financial services. The company's primary sources of revenue include interest income from its lending activities, fees for managing and advising on credit assets, and gains from the sale and securitization of financial assets. ECN Capital also generates income from servicing agreements and partnerships with financial institutions, where they leverage their expertise to manage portfolios on behalf of their clients. Additionally, the company benefits from strategic partnerships with banks and other financial entities, which help expand its service offerings and reach within the financial sector.

ECN Capital Financial Statement Overview

Summary

ECN Capital shows strong cash flow and operational efficiency but struggles with declining revenue and high leverage. Robust cash generation is a positive highlight, while high debt levels pose a risk.

Income Statement

ECN Capital's income statement shows mixed performance. The gross profit margin for TTM is 47.48%, reflecting a strong ability to manage costs relative to revenues. However, the net profit margin is only 6.37%, indicating that profitability is low after accounting for all expenses. Revenue growth from 2024 to TTM was negative at -3.47%, signaling a decline in top-line performance. The EBIT margin improved to 14.18% from the previous year, showing operational improvements, while the EBITDA margin is at 20.26%, highlighting decent earnings before non-cash expenses.

Balance Sheet

The balance sheet exhibits high leverage, with a debt-to-equity ratio of 2.87 in TTM, indicating significant reliance on debt financing. The equity ratio stands at 21.40%, suggesting a moderate level of assets funded by shareholders. Return on equity (ROE) improved to 6.80% in TTM, showing better returns to shareholders but remains low in absolute terms.

Cash Flow

ECN Capital's cash flow performance is robust. Free cash flow grew significantly in TTM compared to the previous year, reaching $76.95 million. The operating cash flow to net income ratio is 5.73, indicating strong cash generation relative to net earnings. Additionally, the free cash flow to net income ratio of 5.67 suggests efficient conversion of profits into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	213.08M	220.76M	159.32M	196.67M	215.37M	266.72M
Gross Profit	101.16M	88.15M	17.12M	90.81M	120.77M	167.44M
EBITDA	43.18M	32.19M	-40.84M	37.11M	-9.94M	22.68M
Net Income	13.58M	7.63M	-106.78M	15.89M	4.97M	15.82M
Balance Sheet
Total Assets	933.46M	937.15M	1.28B	1.41B	1.15B	1.71B
Cash, Cash Equivalents and Short-Term Investments	18.26M	15.46M	23.24M	12.71M	45.04M	37.98M
Total Debt	573.33M	590.94M	917.70M	1.01B	274.60M	531.79M
Total Liabilities	730.23M	726.25M	1.08B	1.22B	927.49M	883.64M
Stockholders Equity	199.84M	207.48M	209.49M	193.68M	218.63M	822.56M
Cash Flow
Free Cash Flow	76.95M	179.73M	-45.44M	-912.20M	131.76M	-80.27M
Operating Cash Flow	77.79M	180.86M	-26.03M	-869.27M	139.73M	-77.61M
Investing Cash Flow	9.14M	147.75M	43.38M	116.25M	-79.83M	-3.19M
Financing Cash Flow	-76.03M	-334.89M	-6.79M	721.07M	-1.83B	35.14M

ECN Capital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.86
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ECN, the sentiment is Positive. The current price of 2.86 is above the 20-day moving average (MA) of 2.66, above the 50-day MA of 2.74, and above the 200-day MA of 2.76, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 61.99 is Neutral, neither overbought nor oversold. The STOCH value of 82.06 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ECN.

ECN Capital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	67 Neutral	$17.01B	11.90	9.70%	3.76%	11.63%	-9.47%
ECN	63 Neutral	C$805.03M	102.14	6.65%	1.40%	54.95%	―
CCORF		$803.09M	156.38	-1.78%	3.20%	―	―
MKP	74 Outperform	C$763.08M	10.50	11.99%	8.44%	19.71%	-15.59%
GCG	71 Outperform	C$1.04B	14.95	5.62%	4.87%	35.78%	-24.67%
DLCG	63 Neutral	C$671.75M	37.65	-151.96%	1.87%	35.48%	-4412.25%
EHMEF		$2.00B	11.17	23.56%	3.40%	―	―

ECN Capital Corporate Events

ECN Capital Announces Board Election Results and Strategic Appointment

ECN Capital Corp. recently held its annual meeting where eight directors were elected, and several resolutions were passed with overwhelming support. Notably, Tarun Mehta was elected to the board, bringing extensive experience from his previous role at Truist Financial Corporation. His appointment as Chair of the Credit & Risk Committee is expected to strengthen ECN Capital’s strategic direction. The meeting results, including the re-appointment of auditors and approval of various plans, reflect strong shareholder confidence in the company’s governance and future plans.

The most recent analyst rating on (TSE:ECN) stock is a Hold with a C$2.35 price target. To see the full list of analyst forecasts on ECN Capital stock, see the TSE:ECN Stock Forecast page.

ECN Capital Corp. Achieves Strong Q1 2025 Financial Results

ECN Capital Corp. reported a strong financial performance for the first quarter of 2025, with adjusted net income reaching $0.03 per share, hitting the top end of its guidance. The company demonstrated resilience amid market volatility, with significant originations in its key segments and an increase in managed assets to $7.2 billion. The Board of Directors declared dividends for common and preferred shareholders, reflecting confidence in the company’s financial health. These results underscore ECN Capital’s robust operational capabilities and its strategic positioning in the financial services sector.

ECN Capital to Release Q1 2025 Financial Results and Host Analyst Briefing

ECN Capital Corp. has announced its intention to file its financial statements and management discussion for Q1 2025 on May 8, 2025, after market close. The company will hold an analyst briefing to discuss these results on the same day. This announcement is significant as it provides stakeholders with insights into the company’s financial performance and strategic direction, potentially impacting its market positioning and investor relations.