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Propel Holdings Inc (TSE:PRL)
TSX:PRL
Canadian Market
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Propel Holdings Inc (PRL) AI Stock Analysis

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TSE:PRL

Propel Holdings Inc

(TSX:PRL)

Rating:78Outperform
Price Target:
C$42.00
▲(15.38%Upside)
Propel Holdings Inc. is showing strong growth potential driven by robust financial performance and strategic corporate events. The company's valuation is reasonable, though technical indicators suggest caution due to overbought conditions. The primary strengths are revenue growth, improved profit margins, and strategic corporate actions. However, challenges with cash flow generation and high debt levels require careful monitoring.
Positive Factors
Financial Performance
Propel delivered solid Q1 results, exceeding expectations on loan growth, PCLs, and EPS, highlighting the resilience of Propel’s customer base.
Revenue Growth
Management anticipates additional LaaS partnerships to contribute in the second half of the year, potentially driving further revenue growth.
Negative Factors
Macroeconomic Environment
Management is acutely aware of the changing macro environment and tariff-related risks, which is expected to translate into selectiveness around origination and steady credit.
Market Valuation
Despite a recent rally in shares, Propel is viewed as undervalued given the expectation for strong earnings growth and growth in LAAS and QuidMarket revenue.

Propel Holdings Inc (PRL) vs. iShares MSCI Canada ETF (EWC)

Propel Holdings Inc Business Overview & Revenue Model

Company DescriptionPropel Holdings Inc. operates as an online financial technology company. The company's online lending platform facilitates access to credit products, such as installment loans and lines of credit under the MoneyKey and CreditFresh brands to American consumers. It also offers marketing, analytics, and loan servicing services. Propel Holdings Inc. was incorporated in 2011 and is headquartered in Toronto, Canada.
How the Company Makes MoneyPropel Holdings Inc. generates revenue primarily through interest income and fees associated with its lending products. The company offers installment loans and lines of credit, targeting consumers who may have limited access to traditional banking services. Propel utilizes proprietary technology to assess creditworthiness and manage risk, enabling them to extend credit to a broader range of customers. Revenue is mainly derived from the interest charged on outstanding loan balances, as well as origination fees and other service charges related to the use of their financial products. Additionally, Propel may engage in strategic partnerships with other financial institutions to expand its market reach and enhance its product offerings.

Propel Holdings Inc Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q3-2024)
|
% Change Since: 23.77%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
Propel Holdings delivered strong Q3 2024 results with record-breaking revenue and growth metrics, a strategic acquisition, and increased dividends, despite facing one-time expenses and challenges in the Canadian market.
Q3-2024 Updates
Positive Updates
Record-Breaking Q3 2024 Results
Propel's Q3 2024 results included record total originations funded of $150 million, up 36% year-over-year, and record revenue of $117.2 million, up 41% from Q3 2023.
Strong Financial Performance
Net income rose to $10.5 million, a 70% increase from the previous year, while adjusted net income was $14.1 million, up 66%. The net income margin increased to 9% from 7% last year.
Acquisition of QuidMarket
Propel announced the acquisition of QuidMarket, a UK fintech lender, for $71 million. The acquisition is expected to be immediately accretive to 2024 and 2025 adjusted EPS.
Dividend Increase
Propel's Board approved an increase in the dividend from CAD 0.56 to CAD 0.60 per share annually, marking the sixth dividend increase since early 2023.
Lending-as-a-Service Growth
The Lending-as-a-Service program has expanded, with new purchasers set to join, positioning the company for strong growth in 2025.
Awards and Recognition
Propel was recognized on the Globe and Mail's Top Growing Companies list and Clive Kinross won the EY Entrepreneur of the Year award for Ontario.
Negative Updates
One-Time Expenses Impact
Net income was adversely impacted by one-time expenses of $2.5 million related to the QuidMarket acquisition transaction.
Canadian Market Challenges
Canada's unemployment rate is higher than the U.S. at 6.5%, with muted retail sales, impacting consumer spending.
Interest Rate Environment
Interest rates have been aggressive in Canada, with the Bank of Canada cutting rates four times in 2024 to 3.75%.
Company Guidance
During Propel Holdings' Q3 2024 earnings call, the company highlighted several key metrics and strategic initiatives. Total originations funded reached a record $150 million, marking a 36% increase compared to Q3 2023, while revenue climbed to $117.2 million, up 41% year-over-year. Net income rose to $10.5 million, a 70% increase from the previous year, and adjusted net income increased by 66% to $14.1 million. The net charge-offs as a percentage of CLAB improved to 11% from 12% in Q3 2023, reflecting strong credit performance. Propel also announced a 7% increase in its dividend to CAD 0.60 per share annually. Additionally, the company discussed the strategic acquisition of QuidMarket, a U.K. fintech lender, expected to be accretive to 2024 and 2025 adjusted EPS. Propel's ongoing growth initiatives include a new partnership with KOHO in Canada and expansion of its Lending-as-a-Service program, positioning the company for continued success into 2025.

Propel Holdings Inc Financial Statement Overview

Summary
Propel Holdings Inc shows robust revenue growth and profitability improvements over recent years, though it faces challenges with operational cash flow generation. The company's high debt levels need careful management to mitigate financial risks. Overall, Propel Holdings is on a positive trajectory with strong revenue and profit growth but must address cash flow weaknesses to ensure long-term financial health.
Income Statement
85
Very Positive
Propel Holdings Inc has shown impressive revenue growth over the years, with a significant increase from $64.58M in 2019 to $416.02M in 2024. The gross profit margin is consistently high at 100%, indicating strong pricing power and cost management. However, the company reported no EBIT or EBITDA for 2024, which could indicate increasing operational costs or strategic reinvestments impacting profits. The net profit margin improved to 11.14% in 2024 from 3.09% in 2019, reflecting enhanced efficiency in converting revenues into net income.
Balance Sheet
78
Positive
The debt-to-equity ratio has remained relatively stable, reflecting prudent financial management though it is on the higher side, posing potential risks if not managed carefully. The equity ratio improved to 38.13% in 2024 from a low of 4.46% in 2019, indicating stronger financial stability. Return on equity (ROE) stands at 22.07% in 2024, showcasing effective use of equity to generate profits. However, the high level of debt suggests risk if earnings do not sustain growth.
Cash Flow
70
Positive
The company's free cash flow has been consistently negative, raising concerns about its ability to generate cash independently from operations. The operating cash flow to net income ratio is negative, indicating that net income does not translate effectively into cash flow. Despite this, Propel Holdings has managed to secure financing to support its cash needs, evidenced by strong financing cash flows.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue447.87M316.70M226.73M123.13M69.07M
Gross Profit416.02M131.99M216.57M123.13M69.07M
EBITDA68.09M42.21M30.66M0.0011.07M
Net Income46.38M27.78M15.13M6.56M7.33M
Balance Sheet
Total Assets551.01M344.26M256.68M149.50M79.05M
Cash, Cash Equivalents and Short-Term Investments20.50M13.75M7.66M7.24M5.25M
Total Debt274.29M201.52M151.57M50.05M52.83M
Total Liabilities340.89M242.74M175.04M74.17M70.64M
Stockholders Equity210.11M101.52M81.64M75.33M8.42M
Cash Flow
Free Cash Flow-61.13M-32.39M-90.59M-54.60M-17.55M
Operating Cash Flow-54.84M-26.95M-85.32M-51.83M-15.42M
Investing Cash Flow-71.90M-5.43M-5.27M-2.76M-2.13M
Financing Cash Flow134.83M38.48M91.01M56.59M16.59M

Propel Holdings Inc Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price36.40
Price Trends
50DMA
34.98
Positive
100DMA
30.34
Positive
200DMA
32.91
Positive
Market Momentum
MACD
0.30
Positive
RSI
51.01
Neutral
STOCH
35.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PRL, the sentiment is Neutral. The current price of 36.4 is below the 20-day moving average (MA) of 37.17, above the 50-day MA of 34.98, and above the 200-day MA of 32.91, indicating a neutral trend. The MACD of 0.30 indicates Positive momentum. The RSI at 51.01 is Neutral, neither overbought nor oversold. The STOCH value of 35.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:PRL.

Propel Holdings Inc Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
C$1.42B16.7632.69%0.05%46.36%64.29%
65
Neutral
kr117.66B28.216.10%3.26%14.38%-77.89%
$1.01B10.655.38%0.26%
81
Outperform
C$298.34M12.6559.15%7.43%1.49%-3.65%
59
Neutral
C$694.51M37.65-151.96%1.47%35.48%-4412.25%
53
Neutral
C$30.04M-6.23%-4.92%68.05%
$2.14B11.5823.56%0.02%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:PRL
Propel Holdings Inc
36.40
10.60
41.09%
LRCDF
Laurentian Bank
22.74
4.65
25.70%
TSE:ACD
Accord Financial
3.51
-0.56
-13.76%
TSE:DLCG
Dominion Lending Centres, Inc. (Canada) Class A
8.95
5.43
154.26%
TSE:OLY
Olympia Financial
123.98
37.53
43.41%
EHMEF
goeasy
134.70
-5.50
-3.92%

Propel Holdings Inc Corporate Events

DividendsBusiness Operations and StrategyFinancial Disclosures
Propel Holdings Reports Record Q1 2025 Results and Increases Dividend
Positive
May 6, 2025

Propel Holdings Inc. reported record financial results for Q1 2025, with significant increases in revenue, net income, and other key financial metrics. The company announced a 9% increase in its annualized dividend, marking the eighth increase since 2023. Propel’s growth is driven by strong consumer demand, particularly from those underserved by traditional credit markets, and the company’s AI-powered technology platform. The tightening of underwriting by traditional financial institutions has provided Propel with an opportunity to expand its market reach, positioning the company for continued growth in 2025.

Private Placements and FinancingBusiness Operations and Strategy
Propel Holdings Enhances Credit Facilities, Reduces Capital Costs
Positive
Apr 28, 2025

Propel Holdings Inc. has announced an increase and amendment to its CreditFresh credit facility, raising it to $400 million, and a refinancing of its MoneyKey credit facility, both resulting in a lower cost of capital. The CreditFresh facility will now bear interest at SOFR plus 620 basis points, while the MoneyKey facility will bear interest at SOFR plus 425 basis points. These changes are expected to lower Propel’s cost of capital by approximately 150 basis points annually, enhancing liquidity to support growth targets. The company’s strong growth in the US loan portfolio, driven by expanding bank partnerships and increased demand from underserved markets, underscores its potential to become a global leader in providing credit to underserved consumers.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jun 25, 2025