GSY
📊 GoEasy’s earnings per share are projected to reach $20 in 2025, up significantly from $9 in 2021, yet the stock price hasn’t reflected this fundamental improvement, lagging significantly below past highs.
📉 Currently trading at a low P/E ratio of 6-7x, GoEasy appears significantly undervalued compared to its historical average of ~15x and sector M&A multiples, presenting a potential rerating opportunity.
🛡️ The company demonstrated resilience by maintaining profits in 2008, and stress tests indicate only a modest (~10%) potential profit decline in a severe recession scenario, further mitigated by lower funding costs and active share buybacks.
@Artedeinvertir:
“GoEasy, we still like it a lot. There have been several interesting things. First, they hired a new CEO with a very interesting track record, having managed much larger loan portfolios than GoEasy’s and generated very large growth at Scotiabank. One might look at the GoEasy chart and say, ‘Well, since the highs, it hasn’t done much, it’s been four or five lost years.’ But in 2021, the company earned $9 per share, and this year, in 2025, it’s going to earn $20. That’s how the stock market works. Here it was also very undervalued. Here it was, like now, six or seven times earnings, and here when it was at $130, it was at 15 times earnings, which is a more normal multiple for when there have been purchase or sale operations in the sector. And well, at True Value, we don’t invest based on price alone. If the price seems attractive, we buy more, increase the investment, considering the risks that may exist. What seems interesting to us is that GoEasy has been repurchasing many shares for a long time; it activated buybacks after a period without repurchasing. It would be very strange for the company to say, ‘Hey, I’m going to have bad results,’ and then repurchase shares. I understand they have good forecasts for the business long-term, not just for one quarter. Many participants ask us about GoEasy, ‘Hey, if there’s a crisis, what will happen?’ GoEasy maintained profits in 2008. Because even in the worst-case scenario, based on stress tests presented to the Canadian banking regulator, GoEasy models a scenario with GDP decline, significant unemployment increase, and oil price drop. If all this happens, the effect on profits is -10%. Instead of earning $20, it earns $18. So, instead of being at a P/E of six or seven, it would be at P/E 8 and still be cheap compared to its historical average of 12-13. Even that -10% would be cushioned because it’s a conservative forecast; the company would have lower advertising costs, and interest rates would fall in a recession, lowering its significant funding costs. All this could compensate, and to the surprise of many, it might maintain profits or see only a slight decline.”
Watch the exact part of the video where @Artedeinvertir talks about GoEasy here:
Watch the video on YouTube
Read more articles analyzing GoEasy (GSY) at the following link. GSY stock.
