The TSX has been riding a bit of a rollercoaster in the last year. Yet lately it’s been on a record run! Between fluctuating commodity prices, global economic uncertainties, and a few unexpected earnings reports, the market’s been anything but steady. Just remember, while the TSX might be having its ups and downs, seasoned investors know it’s all part of the process.
Goeasy (TSX:GSY) stock has been a bit of a wild card lately as well. But don’t let that scare you off. Volatility can often mean opportunity. Goeasy’s long-term potential still shines through. With a solid business model and a history of strong performance, this stock might just be the hidden gem that’s worth a closer look.
Goeasy stock
Goeasy started its journey back in 1990 as a small rent-to-own business. Over the years, it’s grown into a powerhouse in the Canadian alternative financial services sector. Originally known as easyhome, the company focused on providing furniture, appliances, and electronics to customers who needed a bit of flexibility with their payments. Fast forward a couple of decades and goeasy stock made a smart pivot into financial services, launching easyfinancial in 2006. This move opened up a whole new world for the company. It allowed it to offer personal loans to customers who might not have access to traditional bank credit.
The stock itself has had quite the ride. From its early days as a modest player on the TSX, goeasy’s stock has seen impressive growth, especially over the past decade. Investors who got in early were rewarded with substantial returns as the company grew its loan portfolio and revenue. But like any stock with a growth story, it hasn’t all been smooth sailing. There have been ups and downs along the way, particularly when market conditions have been tough. Still, goeasy stock’s resilience and ability to adapt have kept it in the game. This makes it a stock worth watching for those who believe in the long-term potential of the alternative lending market in Canada.
Recent news
Goeasy has been on a roll lately with its recent earnings, and it’s definitely catching some eyes. In the second quarter of 2024, the company reported record loan originations of $827 million. This was a 24% increase from the previous year. This surge pushed their loan portfolio to an impressive $4.1 billion, up 29% from the same period in 2023. Revenue also hit a record high of $378 million, marking a 25% boost compared to the previous year. All this growth is a clear sign that goeasy stock is continuing to cement its place as a major player in the non-prime lending space.
What’s even more exciting is that goeasy didn’t just grow in size, it grew in profitability too. The company’s operating income for the quarter shot up by 33% to $147 million, with an operating margin of 39%. After adjusting for non-recurring items, the adjusted diluted earnings per share (EPS) jumped by 25% to $4.10. Even though it’s dealing with a bit of market volatility, goeasy stock’s strong financial performance shows that it’s well-positioned to keep delivering value to shareholders.
Still valuable
Goeasy is looking pretty attractive right now, and for good reason. With a forward Price/Earnings (P/E) ratio of 10.7 and a strong return on equity of over 25%, this stock is positioned as a value play in the current market. It’s shown consistent profitability with a healthy profit margin of 33.4%. The company’s recent quarterly earnings growth of 17.7% year-over-year is a testament to its resilience and ability to grow even in challenging times.
What makes goeasy stock even more compelling is its commitment to rewarding shareholders. With a forward annual dividend yield of 2.5% and a payout ratio of just 27.7%, there’s plenty of room for future dividend increases. The company’s strong operating margin of 43.1% and substantial cash reserves suggest it’s well-equipped to continue its growth trajectory. All while delivering solid returns. For investors looking for a stock with both growth potential and value, goeasy stock is definitely worth considering.
