Easing interest rates, steady commodity prices, and stronger-than-expected economic conditions have helped the financial sector outpace the broader TSX Composite Index over the past year. This is the reason why many investors who had been cautious are now revisiting this space with renewed interest. But despite the sector’s sharp rebound, some high-quality stocks are still trading well below their recent highs.
In this article, I’ll talk about one such financial stock, goeasy (TSX: GSY), that’s down roughly 25% from its 52-week peak, yet continues to post solid fundamentals and offers attractive long-term upside potential.
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Resilient business with room to grow
If you don’t know it already, goeasy mainly focuses on non-prime leasing and lending services through its easyhome, easyfinancial, and LendCare brands. It helps millions of Canadians access personal and car loans, lease-to-own furniture and appliances, or get point-of-sale financing.
GSY stock is currently trading at around $154.90 per share with a market cap of $2.5 billion. It also pays a quarterly dividend, translating into an appealing 3.8% annualized yield.
Even though goeasy stock is down about 25% from its 52-week high, it’s still up over 170% in the last five years.
What’s been driving GSY stock lately?
The recent decline in GSY stock over the past year can mainly be linked to a few key factors. At the macro level, a softer economic environment and less favourable macro indicators led to an increase in credit loss provisions. While that’s created short-term pressure that temporarily hurt investor sentiment, the company’s performance hasn’t dropped off a cliff. In fact, its first-quarter results suggest that GSY stock is weathering the storm quite well.
Despite economic worries, goeasy managed to grow its loan book by $190 million in the first quarter of 2025 and surpassed a $5 billion loan portfolio shortly after. It also generated strong demand from new customers, while seeing growth in areas like automotive financing and home equity lending.
Growth holding strong despite headwinds
In the March quarter, goeasy reported a 24% YoY increase in its consumer loan portfolio and brought in over 43,000 new customers. Its adjusted net profit came in at $60 million, and its return on equity, even after adjustments, remained healthy at 20.4%. Similarly, the company’s efficiency is also improving, with its first-quarter efficiency ratio down to 26.1% from 27.4% a year ago.
While higher finance costs and cautious credit metrics added some pressure, goeasy is still profitable, expanding its reach and increasing its lending scale. Those are strong signs for long-term investors.
Why is goeasy stock a buy now?
goeasy has proven its ability to grow in all kinds of market conditions. It expects to grow its loan portfolio to as much as $7.8 billion by 2027. That’s big, considering it just crossed the $5 billion mark. It’s also investing in digital platforms, optimizing its pricing and collections strategy, and building stronger partnerships across retail and finance sectors.
These factors could accelerate its financial growth trends in the long run and support a sharp recovery in its share price. Given that, the recent pullback in GSY stock might just be the golden opportunity long-term investors are looking for.
