It’s no secret that the U.S. has a lot more stocks than Canada and, consequently, a lot more high-potential growth stocks like Tesla (NASDAQ: TSLA). However, that doesn’t mean that there aren’t plenty of high-quality Canadian stocks to consider, such as goeasy (TSX: GSY), the rapidly growing specialty finance stock.
Over the last decade, Tesla stock has grown investors’ capital at a compound annual growth rate (CAGR) of 37.2%. That’s unbelievably impressive growth.
Meanwhile, goeasy stock has grown investors’ capital at a CAGR of 28.1% over the last decade, which is also an exceptional pace.
And while goeasy’s 28.1% CAGR equates to a total return of roughly 1090% over the last decade, Tesla stock’s total return of roughly 2,260% is more than twice as high.
This goes to show the power of compounding. It also shows the potential gains that a high-growth stock can offer.
So with that in mind, considering that Tesla has already seen more significant growth, does goeasy stock have more potential than Tesla from here, and could it be worth more than Tesla by 2030?
How fast is the Canadian stock growing?
It’s clear from the performance of goeasy stock over the last decade that it’s a rapidly growing business. But when you look into its finances and see exactly how quickly it’s expanding its operations, it’s certainly impressive.
For example, in just the last five years, goeasy has grown its revenue by 116%. Even more impressively, it has increased its normalized earnings per share (EPS) by over 300%.
That massive growth in profitability is a result of goeasy rapidly and consistently expanding its loan portfolio while keeping charge-off rates manageable and within its target range.
It also helps that goeasy earns tonnes of interest on its loans, and when combined with its manageable charge-off rates, allows its adjusted return on equity to consistently be around 25%, well above its big bank competitors.
Going forward, analysts expect that for full 2023 (which has yet to be released), goeasy will report a 22% increase in sales and adjusted EPS. Furthermore, analysts are expecting another 18% increase in revenue and 19% increase in adjusted EPS for 2024, as the growth stock is expected to continue rapidly expanding its operations.
So goeasy stock certainly has a tonne of potential, both in the near term and over the long haul. But can it compete with a powerhouse growth stock like Tesla, and is it the better investment today?
Does goeasy stock have more potential than Tesla in the coming years?
Right now, goeasy stock has a market cap of roughly $2.7 billion. That’s approximately US$2 billion. Meanwhile, Tesla has a market cap that’s just shy of US$750 billion. So, the chances that goeasy stock will be worth more than Tesla by 2030 is unlikely.
However, that doesn’t mean goeasy can’t close the gap and outpace Tesla stock over the next six years. This is especially true considering that the larger a stock becomes, the harder it is to keep up the same growth rate.
It’s worth noting that both stocks have been impacted by the economy lately. Tesla’s EPS is expected to be impacted this year before rebounding next year. Meanwhile, as a financial stock, there has been increased uncertainty about goeasy and the impact it could see if the economy were to enter a recession.
Both stocks are expected to see similar growth in 2024, though, according to analysts, with Tesla’s EPS expected to jump 22.5%.
So if you’re looking for a high-potential long-term growth stock to buy now, both Tesla and goeasy stock look like top picks.
And while Tesla is one of the most dominant stocks in a disruptive industry, goeasy has plenty of potential too, and offers an exceptional dividend that has increased by a whopping 210% in just the last five years.
