goeasy (GSY) AI Stock Analysis

• Market Cap: $2.48B
• Dividend Yield: 3.22%
• Average Volume (3M): 73.23K
• Price to Earnings (P/E): 9.2
• Beta (1Y): 0.77
• Revenue Growth: 21.86%
• EPS Growth: 12.85%
• Country: CA
• Employees: 2,534
• Sector: Financial
• Sector Strength: 81
• Industry: Financial - Credit Services
• EPS (TTM): 16.68
• Shares Outstanding: 16,317,713
• 10 Day Avg. Volume: 65,284
• 30 Day Avg. Volume: 73,226
• PEG Ratio: 0.71
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.35
• Price to Cash Flow (P/CF): -36.10
• P/FCF Ratio: 2.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$226.17
• Price Target Upside: 48.83% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

goeasy's stock score is driven by strong financial performance, despite high leverage and cash flow challenges. The company's undervaluation and positive strategic initiatives, such as the new CEO appointment and senior notes offering, enhance its growth potential. However, bearish technical indicators and operational risks necessitate cautious optimism.

Positive Factors

Investment Returns

Historical data shows buying the stock at the current multiple has proven to be a highly profitable investment, with significant returns.

Portfolio Management

There are multiple sources of upside to estimates, including potential benefits from high-grading the portfolio and further stock improvements.

Stock Performance

Upgrading shares of goeasy to Outperform from Market Perform indicates increased confidence in the stock's future performance.

Valuation

The stock trades at trough multiples on tariff-scenario earnings, suggesting it has already priced in downside risk from a trade war.

Negative Factors

Macroeconomic Uncertainty

Canadian consumer insolvencies were significantly above pre-pandemic averages, impacting credit performance.

Trade Uncertainty

GSY is exposed to indirect repercussions of U.S. trade uncertainty, which could impact unemployment and credit losses in Canada.

goeasy Business Overview & Revenue Model

Company Description

goeasy Ltd. (GSY) is a Canadian company operating in the financial services sector, specializing in providing non-prime leasing and lending services through its two main divisions: easyhome and easyfinancial. easyhome offers lease-to-own merchandise, including furniture, electronics, and appliances, while easyfinancial provides personal loans to consumers who are often underserved by traditional financial institutions.

How the Company Makes Money

goeasy Ltd. generates revenue primarily through its easyfinancial and easyhome divisions. easyfinancial earns money by issuing personal loans to customers, charging interest rates and fees on these loans, which are typically higher due to the non-prime nature of their clientele. easyhome generates revenue by leasing household goods to customers under lease-to-own agreements, wherein customers make regular payments that eventually allow them to own the merchandise. The company also benefits from repeat business and cross-selling opportunities between its divisions, enhancing customer retention and revenue growth.

goeasy Financial Statement Overview

Summary

goeasy maintains impressive growth in revenue and profitability metrics, showcasing strong operational performance. However, the high leverage and negative free cash flow highlight areas of financial risk. The company must focus on reducing debt levels and improving cash flows to ensure long-term financial stability and growth. Investors should weigh the potential for continued growth against the risks associated with high debt levels.

Income Statement

goeasy has demonstrated robust revenue growth with a Revenue Growth Rate of 21.87%, alongside a strong Gross Profit Margin of 68.88% in the most recent year. The Net Profit Margin stands at a solid 18.58%, reflecting effective cost management and profitability. The EBIT and EBITDA margins of 40.01% and 60.32% respectively indicate healthy operational efficiency. Despite these strengths, the growth trajectory should be monitored for sustainability.

Balance Sheet

The company shows a high Debt-to-Equity Ratio of 3.07, indicating significant leverage which could pose risks during economic downturns. However, its Return on Equity is strong at 23.57%, signifying effective use of equity to generate income. The Equity Ratio of 23.12% suggests a moderate level of asset financing through equity, which is a positive sign amidst high leverage.

Cash Flow

goeasy's cash flow situation is challenging, with negative Free Cash Flow reflecting high capital expenditure requirements and significant debt repayments. The Operating Cash Flow to Net Income Ratio indicates that the company is not generating sufficient cash from operations to cover its net income, a potential risk if sustained long-term. It's crucial for goeasy to improve its cash generation to support future growth and reduce financial risk.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.52B	1.25B	1.02B	826.72M	652.92M
	Gross Profit
1.05B	851.59M	795.88M	622.03M	472.24M
	EBIT
609.66M	476.52M	583.07M	450.26M	343.34M
	EBITDA
918.96M	591.65M	664.38M	529.15M	408.06M
	Net Income Common Stockholders
283.11M	247.90M	140.16M	244.94M	136.50M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
251.38M	144.58M	32.45M	82.88M	62.95M
	Total Assets
5.19B	4.16B	3.30B	2.60B	1.50B
	Total Debt
3.69B	2.89B	2.30B	1.62B	941.65M
	Net Debt
3.44B	2.77B	2.27B	1.54B	878.70M
	Total Liabilities
3.99B	3.11B	2.43B	1.81B	1.06B
	Stockholders Equity
1.20B	1.05B	869.69M	789.91M	443.51M
Cash Flow		Free Cash Flow
-488.61M	-490.58M	-533.77M	-106.32M	45.74M
	Operating Cash Flow
-469.45M	-473.22M	-505.88M	-78.88M	74.41M
	Investing Cash Flow
3.52M	-11.75M	-42.49M	-210.63M	-28.67M
	Financing Cash Flow
572.73M	566.89M	508.55M	298.94M	973.00K

goeasy Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 151.97
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:GSY, the sentiment is Negative. The current price of 151.97 is below the 20-day moving average (MA) of 152.89, below the 50-day MA of 165.97, and below the 200-day MA of 175.38, indicating a bearish trend. The MACD of -3.91 indicates Negative momentum. The RSI at 43.65 is Neutral, neither overbought nor oversold. The STOCH value of 74.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:GSY.

goeasy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GSY	74 Outperform	$2.48B	9.15	25.28%	3.22%	21.86%	12.85%
FFH	73 Outperform	$49.58B	8.55	16.48%	1.08%	13.82%	-6.68%
Sector *	64 Neutral	$14.53B	10.25	8.67%	4.22%	16.51%	-12.20%
LB	53 Neutral	$1.21B	―	-0.24%	7.11%	-3.68%	-111.41%

goeasy Corporate Events

goeasy Ltd. Prices US$400 Million in Senior Unsecured Notes

goeasy Ltd. has announced the pricing of US$400 million in senior unsecured notes due in 2030, with an interest rate of 7.375%. The proceeds, estimated to be approximately C$566.4 million, will be used to partially repay existing debt and for general corporate purposes. The offering is expected to close on April 1, 2025, and includes a currency swap to manage exchange rate risks. This financial move is part of goeasy’s strategy to optimize its capital structure and strengthen its market position in the non-prime lending sector.

goeasy Ltd. Announces US$400 Million Senior Unsecured Notes Offering

goeasy Ltd. announced its intention to offer US$400 million in senior unsecured notes, subject to market conditions, to partially repay its secured facilities and for general corporate purposes. The company plans to enter a currency swap agreement to fix the foreign exchange rate for the proceeds, with the notes expected to be guaranteed by certain subsidiaries. This move is part of goeasy’s strategy to strengthen its financial position and maintain its growth trajectory in the consumer lending industry.

goeasy Ltd. Appoints Dan Rees as New CEO to Drive Growth

goeasy Ltd. has appointed Dan Rees as its new Chief Executive Officer, marking the first time in 25 years that an external candidate has been chosen for this role. Rees, who has a 25-year career at Scotiabank, brings extensive experience in business transformation and growth, which aligns with goeasy’s ambitions to expand its loan portfolio significantly by 2027. His leadership is expected to drive goeasy’s strategic initiatives, including product expansion and operational efficiency, ultimately enhancing shareholder value.

goeasy Ltd. Achieves Record Financial Results and Increases Dividend

goeasy Ltd. reported record financial results for the fourth quarter and full year ending December 31, 2024, highlighting significant growth in loan originations and revenue. The company’s loan portfolio grew by 26% to $4.60 billion, driven by a notable increase in credit applications. Revenue for the quarter reached a record $405 million, marking a 20% increase from the previous year. Despite a slight increase in the net charge-off rate, the company maintained stable credit performance and increased its dividend per share by 25%, indicating strong financial health and positive future prospects.

goeasy Ltd. Schedules Q4 2024 Earnings Release and Conference Call

goeasy Ltd. has announced that it will release its fourth quarter 2024 financial results on February 13, 2025, after the market closes. The company will also host a conference call for analysts and investors on February 14, 2025, to discuss these results. This announcement is significant as it provides stakeholders with an opportunity to gain insights into goeasy’s financial performance and future prospects, potentially impacting investor decisions and the company’s market positioning.