When it comes to investing in growth stocks, one of the biggest winners of late has been goeasy (TSX:GSY). Yet unlike other growth stocks over the last few years, goeasy stock has been around for quite some time. Coming on the scene in 1990, it started out as a home appliance lending company. Since then, it’s expanded rapidly. But what’s been causing the growth lately?
Today, we’re going to look at this, as well as what investors could have made if they had invested a decade ago in 2014. Furthermore, let’s determine if that pattern could repeat itself.
Why so great?
First off, why is goeasy stock so great in the first place? There are a few potential reasons, so let’s look at them first of all. The company is a non-prime lending and lease-to-own company in Canada. It offers various financial products through its easyfinancial, easyhome, and LendCare brands.
The recent interest and growth can come down to a few reasons. First, the stock has seen strong financial performance over the last few years. Its compound annual growth rate (CAGR) since 2012 has been nothing short of miraculous. It boasts a 17.7% CAGR in revenue, 28.9% CAGR in net income, and 24.8% CAGR in diluted earnings per share.
Furthermore, the company continues to expand its market share. This includes through organic growth as well as through acquisitions. And during this period, when Canadians want the lowest rate they can get, goeasy stock has become a go-to source.
More record earnings
Not only did go easy stock report strong fourth-quarter results recently, but the stock also reported a solid full year. Revenue was up 24% in the quarter, with full-year results up 23%. Loan originations increased 12% in the fourth quarter and 14% in 2023. Net income surged 161% in the fourth quarter compared to 2023 levels and 79% for full-year results. Earnings per share also climbed 154% year over year in the fourth quarter and 72% for the year.
There was growth across all business segments as well as improved credit performance. New legislation and the increased cost of borrowing could be potential negatives in the future, especially with economic uncertainty. And yet, the company continues to hold a strong future outlook.
Over the next three years, goeasy stock projects continued growth in its loan portfolio and profitability. Plus, the stock will focus on expanding its product offering, distribution channels, and risk-based pricing strategies. So, there could certainly be more on the way for investors.
What happened to that $1,000?
Between 2014 and 2024, shares of goeasy stock grew a whopping 871%. This would have turned your original 58 shares into $9,570 as of writing! Plus, you would have been gaining cash through dividends as well.
But can this happen again? This will come down to continued demand in the non-prime lending market. And that does look likely with more and more Canadians seeking other options. Further, goeasy stock will need to continue to expand its offering for future growth. Again, that could happen, but we’ll have to see how much. Then there’s that regulatory environment, and we’ll also need to see how new rules affect the stock.
Overall, however, goeasy stock has proven its worth time and time again. It looks like it’s here to stay, and while you may not see 871% growth in the next decade, even half that could lead to riches.
