August unveiled a growing trend of consumer loan activity in retail. Royal Bank of Canada reported a strong uptick in credit card loans, and those who were rejected by banks took loans from non-prime lenders like goeasy (TSX: GSY). Increasing loan activity drove goeasy stock up 17.5% in August alone. There seems to be no stopping this non-prime lender.
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goeasy plays catch-up with investors
After four years of slowdown, goeasy stock changed its course and is back to its 2021 high of $213. If you look at the four-year growth from September 10, 2021, to September 10, 2025, the stock surged only 0.4%. However, the five-year rally is 230% and the five-month rally is 51%. This return shows why you should not buy a stock at its peak and instead wait for the dip.
Even if you invested during the September 2021 peak, you could have invested more during the downturn to reduce the average cost per share and get some positive returns. Even if you invested at the peak, the stock gave regular quarterly dividends and grew them by a range of 5.5% and 38%.
Does it mean goeasy is no longer an attractive investment at the current price point? To understand that, you need to know the why behind the rally.
Why is goeasy stock rising?
As a non-prime lender, goeasy benefits when more people take loans and repay them on time. The lender earns money from loan processing fees and interest charged on loans. A portion of net interest income is redistributed as dividends.
In October 2021, news floated that the Bank of Canada would hike the interest rate, making borrowing expensive.
When borrowing becomes expensive, loan volumes fall and the risk of default increases. An interest rate hike even affects banks. The effect on the non-prime lender is higher as credit risk increases.
goeasy’s stock price is determined by the value and quality of its loan portfolio. Hence, the stock lost 56% of its value between October 2021 and July 2022. Since then, the stock has shown tepid growth as the company’s net charge-off rate increased.
Things reversed in the second quarter of 2025, and goeasy saw record volume of loan applications, a 23% year-over-year growth. The lender gave record new loans of $904 million, up 9% year over year. Its loan portfolio increased to $5.1 billion, and the net charge-off rate fell to 8.8% from 9.36% a year ago quarter. The improved quality of the loan portfolio is reflected in the stock price.
A major reason for this rally was interest rate cuts that began in July 2024. Even then, the growth was tepid as consumers anticipated more rate cuts. However, the rate cuts paused in April 2025 as Trump’s tariffs risked increasing inflation. That is when consumer loan activity revived and goeasy stock surged 51% since then.
Is there more upside for goeasy?
With tariff uncertainty easing, consumers are resuming their purchasing. You can see a surge in retail and discretionary spending, with Canadian Tire reporting a surge in discretionary items, and the stock of automotive components maker Magna International rising. These stocks indicate that momentum is picking up in the lending space, which suggests that goeasy could report strong earnings in the second half and its stock could rise further.
Is this stock a buy at the current high?
The recent buying activity has put the stock in the overbought category with a Relative Strength Index (RSI) of 74. The RSI measures the 14-day stock price momentum, and a reading above 70 points the needle to oversold. I would avoid buying the stock now and wait for a seasonal dip in October or January. Buying the dip will help you lock in a higher dividend yield, reduce your downside, and increase upside.
What are the chances of a market correction?
While the market has recovered, Trump tariff uncertainty remains. Any shocks from the U.S. president will affect the goeasy stock. Moreover, profit booking by opportunistic investors could lead to a correction. If you own this stock, you could consider selling it near the end of December and buying it back in the seasonal dip.
