Is Now the Right Time to Buy goeasy Stock? Here’s My Take

goeasy (TSX:GSY) stock has seen share prices surge in the last year, including after earnings. But is the stock now too expensive?

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Shares of goeasy (TSX:GSY) continue to surge, with shares hitting 52-week highs last week and only climbing higher. There were a few factors that influenced the recent surge in share price. This included a dividend increase as well as record results.

But are shares of goeasy stock now too high? Today, we’ll take a look and see what investors should consider.

What’s been happening lately?

Shares of goeasy stock have seen its shares rise by about 41% in the last year alone. And that’s still not while hitting all-time highs. This was experienced back during the pandemic when the loan provider saw a surge in consumers wanting the best rates.

Yet despite a share price lower than all-time highs, there have been a few things contributing to the rise in share price. This includes strong earnings, with the stock recently reporting results that exceeded analyst estimates. This helped boost investor confidence and helped them look ahead to growth prospects.

In fact, the company reported record results for the quarter yet again. The stock reported the 90th consecutive quarter of positive net income, with loan originations up 12% year over year. Its loan portfolio was up 30% as well, hitting $3.65 billion.

Even more dividends

goeasy stock is already a Dividend Aristocrat, raising its dividend at least annually for 10 years now. The recent full-year results allowed the company to increase its dividend by a whopping 22%! Investors can now grab a 2.64% dividend yield as of writing.

That dividend increase shouldn’t be overlooked. Sure, the company is seeing record results. But they still need to be strong overall. And that has proven to be the case for goeasy stock. It’s managed to see more and more interest in each area of its loan business.

What’s more, the loan business doesn’t look to be going anywhere — especially when you can get non-prime rates that hopefully are lower than the interest rates we’re seeing right now. And as we saw during the pandemic, this can also help investors lock in strong rates, even during low-rate environments.

Future outlook

greasy stock is now forecasted to grow earnings and revenue by 14.1% and 30.5%, respectively — not just in the next year but annually for the next several years. Earnings per share should also increase by 13.1% per year as well. These alone are great reasons to pick up the stock.

What’s more, analysts believe there is more room to run. The loaning stock currently has a price target of $202.78 set by analysts. That would see a current potential upside of 17% as of writing. Again, another strong reason to buy.

But why do I like it? goeasy stock has offered stable growth in the best of times and worst of times. It’s proven that its decades of growth behind it should continue for the foreseeable future. And while shares may be up, it still doesn’t look overvalued trading at 12 times earnings! So, is goeasy stock still a good buy? I’d say that’s a resounding “yes.”

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has positions in Goeasy. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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