goeasy (TSE:GSY) Releases Earnings Results

goeasy (TSE:GSY) posted its earnings results on Wednesday. The company reported C($20.25) EPS for the quarter, FiscalAI reports. goeasy had a net margin of 14.07% and a return on equity of 19.42%. The company had revenue of C$446.40 million during the quarter.

Here are the key takeaways from goeasy’s conference call:

• The company recorded significant LendCare-related hits in Q4 including an incremental CAD 178M charge?off, a CAD 160M goodwill impairment and a large allowance increase, with LendCare net charge?offs at 40.6% for the quarter versus ~12% in easyfinancial unsecured loans.
• Management unveiled a six?point remediation plan — prioritizing growth in the proven easyfinancial direct channel, tightening LendCare underwriting, integrating operations, and cutting ~9% of staff to realize ~CAD 30M annualized savings — and has suspended dividends and buybacks to preserve liquidity.
• easyfinancial (direct?to?consumer) remains the company’s healthy core: total consumer loans grew to CAD 5.5B (+~20% YoY) and management says direct channels (57% of the portfolio) continue to perform as expected and are the focus for profitable growth.
• The company restated prior periods for accounting errors (timing of customer payments and Stage 3 interest accruals) and disclosed a LendCare-specific IFRS 9 control deficiency, indicating weaknesses in financial reporting and oversight that management says it will remediate.
• Near?term outlook and funding: Q1 loans expected at CAD 5.3–5.4B, Q1 net charge?offs guided to 17.5–18.5% and full?year net charge?offs to mid?teens, with amended securitization/revolver arrangements in place and management stating no new equity is required under current assumptions.

goeasy Price Performance

Shares of TSE:GSY opened at C$34.87 on Friday. goeasy has a one year low of C$33.13 and a one year high of C$216.50. The stock has a market capitalization of C$558.83 million, a price-to-earnings ratio of 2.54, a PEG ratio of 0.84 and a beta of 0.16. The company has a 50-day simple moving average of C$90.50 and a 200-day simple moving average of C$126.99. The company has a debt-to-equity ratio of 383.82, a quick ratio of 28.46 and a current ratio of 42.83.

Analysts Set New Price Targets

Several brokerages have issued reports on GSY. National Bank Financial dropped their price objective on goeasy from C$50.00 to C$38.00 in a report on Thursday. ATB Cormark Capital Markets downgraded goeasy from a “speculative buy” rating to a “sector perform” rating and reduced their target price for the company from C$85.00 to C$42.00 in a report on Thursday. Royal Bank Of Canada dropped their price target on goeasy from C$52.00 to C$33.00 in a research note on Thursday. Scotiabank cut their price target on goeasy from C$61.00 to C$55.00 in a research report on Thursday. Finally, Desjardins reduced their price objective on goeasy from C$64.00 to C$47.00 and set a “buy” rating for the company in a research note on Thursday. Two investment analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, goeasy has a consensus rating of “Hold” and a consensus target price of C$72.00.

goeasy News Summary

Here are the key news stories impacting goeasy this week:

• Positive Sentiment: Desjardins kept a “buy” rating and lowered its target to C$47, still implying ~35% upside vs. the current price — this signals at least one broker sees recovery potential. Desjardins target
• Positive Sentiment: Scotiabank lowered its target but still projects C$55, a material upside view that supports longer?term recovery narratives. Scotiabank target
• Positive Sentiment: Raymond James trimmed its target to C$50 but continues to model a significant upside, indicating some analysts expect earnings recovery after the current headwinds. Raymond James target
• Neutral Sentiment: Multiple brokers trimmed targets and ratings (TD to C$36/hold; National Bank to C$38; Jefferies to C$39; ATB Cormark downgraded to “sector perform” with C$42). These changes narrow upside expectations and reflect reassessments of near?term earnings but are mixed in conviction. Analyst roundupNBF note
• Negative Sentiment: goeasy reported a large Q4 loss of roughly C$336.9M driven by charges tied to LendCare, which directly hit profitability and spurred investor concern about integration and credit costs. Q4 loss / LendCare charges
• Negative Sentiment: Reuters reported Canadian banks have about C$880M exposure to goeasy, highlighting potential systemic counterparty scrutiny and possible funding/credit concerns that could pressure sentiment. Reuters banks exposure
• Negative Sentiment: Royal Bank lowered its target to C$33 (below the current price), reflecting at least one major house that now sees downside risk after the earnings and charge disclosures. RBC target
• Negative Sentiment: Market coverage pieces noted the stock trading notably lower on these developments, indicating the pieces above are already affecting liquidity and sentiment. Market reaction article

About goeasy

goeasy Ltd provides financial services to own furniture, electronics, computers, and appliances. It offers merchandise leasing of household furnishings, appliances, and home electronic products to consumers under weekly or monthly leasing agreements. The company also offers unsecured installment loans to consumers. Its reportable business segments include easyhome and easyfinancial, of which it derives maximum revenue from easyfinancial segment.