Propel Holdings Inc (PRL) AI Stock Analysis

• Market Cap: C$1.42B
• Dividend Yield: 0.05%
• Average Volume (3M): 117.20K
• Price to Earnings (P/E): 16.8
• Beta (1Y): 1.29
• Revenue Growth: 46.36%
• EPS Growth: 64.29%
• Country: CA
• Employees: 620
• Sector: Financial
• Sector Strength: 72
• Industry: Financial - Credit Services
• EPS (TTM): 0.75
• Shares Outstanding: 38,907,715
• 10 Day Avg. Volume: 106,440
• 30 Day Avg. Volume: 117,196
• PEG Ratio: 1.06
• Price to Book (P/B): 4.42
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -29.60
• Enterprise Value/Market Cap: 0.90
• Enterprise Value/Revenue: 0.76
• Enterprise Value/Gross Profit: 4.41
• Enterprise Value/Ebitda: 4.10
• 1Y Price Target: C$41.80
• Price Target Upside: 14.84% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 78 Outperform
• 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 Business Overview & Revenue Model

Company Description

Propel 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 Money

Propel 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 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

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

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

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.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	447.87M	316.70M	226.73M	123.13M	69.07M
Gross Profit	416.02M	131.99M	216.57M	123.13M	69.07M
EBITDA	68.09M	42.21M	30.66M	0.00	11.07M
Net Income	46.38M	27.78M	15.13M	6.56M	7.33M
Balance Sheet
Total Assets	551.01M	344.26M	256.68M	149.50M	79.05M
Cash, Cash Equivalents and Short-Term Investments	20.50M	13.75M	7.66M	7.24M	5.25M
Total Debt	274.29M	201.52M	151.57M	50.05M	52.83M
Total Liabilities	340.89M	242.74M	175.04M	74.17M	70.64M
Stockholders Equity	210.11M	101.52M	81.64M	75.33M	8.42M
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 Flow	134.83M	38.48M	91.01M	56.59M	16.59M

Propel Holdings Inc Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 36.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PRL	78 Outperform	C$1.42B	16.76	32.69%	0.05%	46.36%	64.29%
Sector *	65 Neutral	kr117.66B	28.21	6.10%	3.26%	14.38%	-77.89%
LRCDF	―	$1.01B	10.65	5.38%	0.26%	―	―
OLY	81 Outperform	C$298.34M	12.65	59.15%	7.43%	1.49%	-3.65%
DLCG	59 Neutral	C$694.51M	37.65	-151.96%	1.47%	35.48%	-4412.25%
ACD	53 Neutral	C$30.04M	―	-6.23%	―	-4.92%	68.05%
EHMEF	―	$2.14B	11.58	23.56%	0.02%	―	―

Propel Holdings Inc Corporate Events

Propel Holdings Reports Record Q1 2025 Results and Increases Dividend

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.

Propel Holdings Enhances Credit Facilities, Reduces Capital Costs

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.