Down Almost 82% From Its All-Time High, Is goeasy Still a Buy?

goeasy stock has lost significant value. However, pressure on goeasy’s loan portfolio and margins remain a concern.

Key Points
  • goeasy stock has plunged nearly 82% from its all-time high as investor confidence deteriorated rapidly in recent months.
  • The sell-off was driven by short-seller accounting allegations, large incremental charge-offs and write-downs, withdrawn guidance, and a suspended dividend.
  • With credit losses spiking and goeasy posting a major Q4 2025 loss amid ongoing portfolio and margin pressure, the stock is likely to remain volatile.

Shares of goeasy (TSX: GSY), a leading Canadian subprime lender, have come under intense pressure, falling nearly 82% from their all-time high. The decline has been particularly sharp in recent months. Over the past month alone, the TSX stock has dropped more than 64%, leaving it trading roughly 71% lower year to date.

While goeasy stock significantly underperformed the broader equity market, it was considered a strong investment for many years. The financial services company consistently delivered robust double-digit growth in both revenue and earnings, supported by expansion in its consumer lending business. In addition, management maintained a track record of steadily increasing the company’s dividend, which strengthened the stock’s appeal for long-term investors.

woman considering the future

Source: Getty Images

Here’s why goeasy stock dropped

goeasy’s fortunes began to shift after a report released by Jehoshaphat Research accused it of manipulating its accounting practices. The short-seller alleged that the lender inflated its earnings and concealed potential credit losses. goeasy firmly rejected the allegations. However, the report heightened investor scrutiny and contributed to mounting uncertainty around the company’s financial reporting.

Concerns intensified further when management announced it expects to record an incremental charge-off of approximately $178 million in the fourth quarter of 2025 against gross consumer loans receivable of $5.5 billion as of December 31, 2025. goeasy also indicated that it anticipates a related write-down of about $55 million tied to loan interest and fees.

In addition, goeasy projected a net increase in its allowance for credit losses on gross consumer loans receivable during the quarter compared with the amount reported as of September 30, 2025. In response to these developments, the company withdrew both its previously issued fourth-quarter 2025 outlook and its three-year financial forecast.

Investor sentiment deteriorated further after goeasy announced the suspension of its quarterly dividend. The decision removed a key component of the stock’s investment appeal, triggering additional selling pressure in the market.

Is goeasy stock a Buy?

goeasy stock has fallen sharply from its all-time high, but the notable decline does not necessarily make the shares attractive. Despite the significant correction, goeasy stock does not appear undervalued, and ongoing uncertainty surrounding the company’s outlook limits the case for buying at current levels.

During the fourth quarter of 2025, the company recognized $177.9 million in incremental loan charge-offs related to the LendCare portfolio. As a result, credit losses increased significantly. Total net charge-offs in the fourth quarter of 2025 reached 23.8% of average gross consumer loans receivable on an annualized basis, a sharp rise from 9.2% in the same quarter of 2024.

The deterioration in credit performance pushed the company into a loss. goeasy reported an adjusted net loss of $146.9 million in the fourth quarter of 2025, compared with adjusted net income of $57.7 million in the fourth quarter of 2024. On a per-share basis, the adjusted loss came in at $8.93, a notable reversal from the $3.32 in adjusted earnings recorded in the prior-year period.

Looking ahead, pressure on goeasy’s loan portfolio is expected to persist. Gross consumer loan receivables are likely to remain under strain, while the total yield on consumer loans is expected to decline year over year. These trends could weigh on revenue growth, limiting improvement in the company’s top line.

At the same time, elevated credit provisions and continued margin pressure may further affect profitability in the near term. With both revenue growth and earnings facing headwinds, the company’s financial performance could remain volatile.

Given the pressure on profit margins and the uncertainty surrounding a recovery in its loan portfolio, goeasy stock does not currently present a compelling buying opportunity despite its significant pullback from its all-time high.

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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