The multi-bagger: it’s what every investor dreams about. Buying a stock and seeing it just surge year after year, and you become the person everyone talks about for “buying it back when.”
The thing is, how on earth are you supposed to find that multi-bagger? And when do you sell? The key is to find a stock that combines a large growth runway with a valuation that doesn’t fully price in that runway yet. The best five-year winners usually have expanding revenue, improving profitability, a clear competitive edge, and a business model that can scale without needing constant reinvention.
While not a guarantee, the business can have enough growth, earnings power, and investor interest to possibly look much larger five years from now.
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EQB
That’s why today we’re looking at EQB (TSX: EQB), known as Canada’s Challenger Bank, and the label fits now that it’s the seventh largest bank in Canada. EQB stock offers residential lending, commercial lending, deposits, banking services, and wealth management. Most recently, EQB stock had $138 billion in combined assets under management (AUM) and administration at the end of fiscal 2025. Yet its market cap recently sat around $4.2 billion, a fraction of the Big Six banks.
The numbers just don’t fit the story. EQB stock deposits reached nearly $10 billion at the end of fiscal 2025, up 10% year over year. Its customer base reached 607,000, up 18% year over year. EQB stock also spent the last year dealing with credit pressure and cost control, and the turnaround is beginning to show.
Into earnings
In Q1 2026, EQB stock reported adjusted revenue of $306.8 million. Adjusted pre-provision pre-tax earnings came in at $156.2 million, up 9% from the prior quarter. Adjusted return on equity improved to 11.1%, up 360 basis points from Q4. The efficiency ratio also improved to 49.1%. That’s a key number as it shows costs consumed less than half of revenue.
The year-over-year picture still shows pressure, however. Adjusted diluted earnings per share (EPS) fell 24% from the prior year. Adjusted net income fell 27% from the prior year, so EQB stock hasn’t fully escaped the credit cycle. Still, the quarter-over-quarter improvement suggests the worst may be easing. Meanwhile, the company still trades at 19 times earnings, with a 2% dividend yield. That alone can create a strong income, even from $7,000.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| EQB | $114.59 | 61 | $2.24 | $136.64 | Quarterly | $6,990.00 |
Looking ahead
What makes this a solid multi-bagger looking ahead is that EQB stock is still in growth mode, whereas the other Big Six banks are steady, but boring. The Big Six still dominate, but many Canadians want better savings rates, lower-fee banking, digital tools, and more flexible financial products. If it keeps adding customers and deposits, EQB stock can use that base to support more lending and more fee-based products.
Furthermore, EQB stock has residential lending, commercial lending, reverse mortgages, wealth management, and digital banking. That gives it several ways to grow, not just one. It also gives it cross-selling potential as EQ Bank’s customer base expands. While investors shouldn’t expect an overnight sensation, the past doesn’t lie, with shares up 18% in the last year and 115% in the last five years.
Bottom line
EQB stock looks like a Canadian stock with real multi-bagger potential, offering scale, but not too much scale. Q1 2026 showed a clear profit rebound from Q4, and the stock still trades at a much lower forward earnings multiple than many high-growth names.
Investors should respect the credit and housing risks. Yet for those looking beyond the usual Big Six banks, EQB stock could be one of the more interesting Canadian growth stories to watch.
