Shares of goeasy (TSX:GSY) have absolutely soared to end 2023. The loan company has seen a huge increase in share price, as it looks as though interest rate hikes may become a thing of the past. Yet the company has proven, even during this downturn, that it can achieve record-setting loan originations.
But with shares now up 53% year to date as of writing, is goeasy stock still a buy?
Why the jump?
Shares of goeasy stock jumped as the company recently came out with their earnings report last month. Since then, there’s been a huge increase upwards. The company achieved $722 million in loan originations, up 13% from the year before. Its loan portfolio increased 33% as well, with revenue up 23% to $322 million. Diluted earnings per share (EPS) were up 35%, with the company achieving yet another record volume of applications for credit.
Furthermore, the company continued to see credit and payment performance remain stable. Operating income hit a record $127 million, up 39% as well, with net income up 41% to $66.3 million. All in all, it was a very impressive quarter, with record growth and reduced credit losses, leading many to believe goeasy stock is the one to beat.
Management remains confident that the company will not just meet but indeed exceed expectations for its forecasts. That comes even with higher borrowing costs, and, therefore, as these start to come down, the company should see even more growth in the future — especially when Canadians have cash back in their pockets.
Analysts agree
Analysts were quick to weigh in on goeasy stock and its positive results. The company went from being a “hold” to a “buy” pretty much across the board, with potential target prices increasing as well. The average now sits at $173 per share, according to Refinitiv data.
And honestly, that means there is still growth to come. The company continues to look attractive for a number of reasons. It should achieve double-digit EPS growth for the remainder of the year at least. And it’s continued to demonstrate a solid credit performance.
Furthermore, there are numerous growth initiatives underway. This includes expanding geographically, through acquisitions and, of course, offering more products. The stock should therefore continue to outperform not just in 2023 but through 2024 as well.
Is it a buy?
Sure, shares of goeasy stock have increased substantially this year. But this is a strong stock that has a huge history of growth. It’s been around since the 1990s, so it’s not just some up-and-coming stock that’s bound to drop eventually.
Analysts still believe it’s undervalued, even with shares rising so much in the last month or two. The company is set up to exceed its high end of the goals set out for its loan growth during the last three years. And that should certainly see shares rise further.
Plus, with both goeasy stock and analysts believe it’s on track for substantial double-digit growth through to at least 2025. Oh, and add into that a dividend yield of 2.34%. So, is goeasy stock a buy? The answer is simply a resounding yes.
