goeasy (TSX:GSY) is one of the top TSX stocks that has compounded investors’ wealth over time. The subprime lender has a history of consistently delivering solid financials, which has driven its share price and dividends. This pullback is surprising, especially as it comes at a time when broader economic conditions appear stable and interest rates are trending downward.
Here’s what dragged goeasy stock lower
Shares of goeasy have faced significant pressure in recent weeks, falling more than 21% over the past month and roughly 25% below their 52-week high. In comparison, the broader Canadian market has fared much better so far in 2025.
The primary trigger behind this sharp drop was a short-seller report released by Jehoshaphat Research, which accused goeasy of manipulating its accounting practices to inflate earnings and conceal potential credit losses.
The company swiftly and firmly denied the claims, describing them as “false and malicious.” In its response, goeasy’s management reiterated confidence in the health of its loan portfolio and the company’s growth outlook for 2025. This has helped reassure investors’ confidence in the company’s fundamentals, with the stock showing signs of recovery.
goeasy could deliver double-digit earnings growth
While the report eroded significant market value, the company’s underlying fundamentals remain strong. Over the past five years, goeasy’s revenue increased at a compound annual growth rate (CAGR) of 22.7%. Further, its earnings have slightly outpaced that revenue growth, reflecting operating leverage and steady credit performance. This consistently strong earnings growth has driven goeasy stock higher.
Shareholders have also benefited from goeasy’s commitment to returning capital. goeasy has paid dividends for 21 consecutive years and has raised its annual payout for 11 years in a row.
Looking ahead, goeasy’s growth story shows no signs of slowing. Management expects the consumer loan portfolio to grow to between $7.35 billion and $7.75 billion by 2027, laying a strong foundation for future revenue expansion. Although the average yield on loans could dip slightly, this decline reflects a strategic shift toward more secured lending, a move that reduces risk while maintaining profitability. Meanwhile, the company’s diversified funding base and continued expansion into new products and markets should help drive further growth.
The benefits from solid top-line growth, steady credit performance, and operating efficiency position goeasy to deliver double-digit earnings growth in future years. This sustained earnings momentum will support a recovery in the stock price and strengthen goeasy’s ability to keep increasing its dividend in the years ahead.
Is goeasy stock a buy now?
goeasy has maintained strong momentum in its business, benefiting from its leadership position in Canada’s large subprime lending market. This dominance and diversified funding positions goeasy to deliver higher earnings and consistent payouts in the coming periods.
Despite these strengths, the recent decline has pushed GSY’s valuation down. It trades at just eight times its projected earnings over the next 12 months, a figure below its historical average. This lower multiple, combined with the company’s potential for double-digit earnings growth, suggests the stock is undervalued. On top of that, goeasy also offers a dividend yield of 3.6%.
In short, goeasy stock offers growth, income, and value near the current market price, making it a compelling long-term bet.
