goeasy (TSX:GSY) is an alternative financial services company that offers leasing and lending services to subprime customers under the easyhome, easyfinancial, and LendCare brands. It serves customers often ignored by traditional financial institutions, thereby carving out a niche market for itself.
Source: Getty Images
goeasy’s historical performances
Since starting its customer lending services in 2006, the Mississauga-based company has broadened its product portfolio—offering a wide range of interest rates to serve the whole non-prime credit market—together with its omnichannel distribution network spanning online, mobile, and point-of-sale financing across multiple sectors, has fueled loan originations and, in turn, expanded its loan portfolio. By the end of the second quarter of 2025, its loan portfolio stood at $5.1 billion.
These expansions have boosted its financials, with its revenue and diluted EPS (earnings per share) growing at an annualized rate of 19.4% and 27.6%, respectively, for the last 10 years. Continuing its financial uptrend, the company’s topline has grown by 10% to $810 million in the first two quarters of this year, while its diluted EPS has increased by 4.3%. Amid these healthy performances, the company has returned around 1,725% over the last 10 years at an annualized rate of 33.7%.
Additionally, goeasy has consistently rewarded shareholders, paying uninterrupted dividends for 21 years and increasing them at a remarkable annualized rate of 29.5% over the past 11 years. With a quarterly dividend of $1.46 per share, the stock offers a reasonable forward yield of 2.79%. Let’s now examine its growth prospects.
goeasy’s growth prospects
The Canadian subprime market has grown at an annualized rate of 4.2% over the last five years, reaching $231 billion in 2024. Although goeasy has delivered strong growth in recent years, it currently holds only 2% of the Canadian subprime market, leaving significant room for expansion. Given its expanding product offerings, strategic initiatives, and increasing market penetration, the company is well-positioned to strengthen its position, thereby driving its financial performance.
The government of Canada has lowered the maximum allowable interest rate to 35% (annual percentage rate) from January 1, 2025. Meanwhile, the company has been able to reduce its weighted average annual interest rate from 40% in 2019 to 27.9% in the second quarter of 2025. It is also working on bringing the weighted average annual interest rate down further, which could help in attracting more customers and driving its loan portfolio.
Along with these growth initiatives, the company has adopted advanced modelling, analytical techniques, and a robust risk appetite framework to identify key trends and areas of opportunity or concern, thereby optimizing its lending decisions. These initiatives could help improve its profitability. Amid all these growth initiatives, goeasy’s management expects its loan portfolio in 2027 to be between $7.35-$7.75 billion. The midpoint of the guidance represents a 48% increase from its current levels. Its revenue guidance represents an annualized growth rate of 11.4% over the next three years, while its operating margin could rise to 43% by 2027. Therefore, the company’s growth prospects look healthy.
Investors’ takeaway
Despite the challenging macro environment, goeasy has delivered an impressive return of 27.8% this year, outperforming the broader equity markets. Despite these healthy returns, it trades at an attractive valuation, with its NTM (next-12-month) price-to-sales and NTM price-to-earnings multiples at 1.8 and 10.3, respectively. Considering all these factors, I believe goeasy would be an excellent buy at these levels.
