This investment report conducts a deep-dive analysis of goeasy Ltd. (GSY) across five critical dimensions, including Business Moat and Future Growth potential. Updated as of January 15, 2026, the study benchmarks the stock against industry peers like OneMain Holdings and Enova International to deliver clear, data-driven insights.
Verdict: Positive
goeasy Ltd. dominates the Canadian non-prime lending market, serving borrowers who are too risky for banks but deserve better rates than payday lenders. The business is in a very good position, generating strong revenue of ~440 million and a high return on equity of 25%. However, investors should be aware that rising loan loss provisions of 157 million are currently pressuring net income, though the core model remains resilient.
Compared to competitors, goeasy holds a massive advantage due to new regulatory rate caps that are eliminating smaller, high-cost rivals and consolidating market share. The stock appears undervalued, trading at just 10x earnings while paying a generous 4.65% dividend yield.
Investor Takeaway: Suitable for long-term investors seeking growth and income, provided they can tolerate moderate volatility during the credit cycle.
CAN: TSX
goeasy Ltd. operates as a leading non-bank financial services provider in Canada, focusing primarily on the large population of consumers who are underserved by traditional financial institutions. The company’s business model is built on providing credit to non-prime borrowers—those with bruised credit histories or thin credit files—through two distinct segments: easyfinancial and easyhome. easyfinancial offers unsecured and secured personal loans, auto loans, and point-of-sale financing, while easyhome provides lease-to-own services for furniture, appliances, and electronics. By combining a vast physical network of over 400 locations with a robust digital lending platform, goeasy captures customers through multiple channels. The company’s strategy revolves around originating high-yield assets while managing risk through proprietary credit scoring models, allowing them to lend where banks will not, yet at rates significantly lower than payday lenders.
The company’s primary engine of growth and profitability is easyfinancial, its consumer lending arm. This segment offers installment loans ranging from $500 to $100,000 and contributes approximately 91% of the total revenue, generating 1.51B in revenue and 666.41M in operating income over the last fiscal year. These loans are designed for consumers who need liquidity for debt consolidation, emergencies, or major purchases but cannot access bank credit. The total addressable market for non-prime credit in Canada is substantial, estimated to include over 9 million Canadians with credit scores below 720. This market continues to grow at a steady CAGR as major banks tighten credit standards and immigration swells the population of 'new-to-credit' individuals. The profit margins in this segment are robust, driven by a total yield on consumer loans of approximately 34.10%, which provides a significant buffer against credit losses and operational costs. While competition exists, the market is fragmented; goeasy holds a dominant position compared to smaller, fractured payday lenders and emerging fintech players.
When comparing easyfinancial to its main competitors, it occupies a unique 'sweet spot' in the Canadian lending landscape. Its primary direct competitor is Fairstone Bank, but goeasy distinguishes itself through a more seamless omnichannel experience and faster speed of funding. Below this tier are payday lenders like Money Mart, which charge astronomically higher annualized rates (often 400%+), and above are the 'Big 6' Canadian banks, which generally avoid this risk tier entirely. Fintech competitors like Mogo or Borrowell offer some overlap but often lack the balance sheet depth, physical servicing presence, or the secured lending capabilities (home equity/auto) that goeasy has developed. This positioning allows goeasy to act as a graduation platform: customers might start with a high-rate unsecured loan and graduate to lower-rate secured products as their credit improves, a lifecycle value that competitors struggle to replicate.
The consumer profile for easyfinancial is typically a working-class Canadian with an average income, often experiencing a transient life event that damaged their credit, or a new Canadian building a financial footprint. These consumers are highly sticky; once approved, they tend to renew or refinance their loans multiple times because they have few other dignified options. The average customer utilizes these funds for debt consolidation, effectively lowering their monthly payments compared to the high-interest credit cards or payday loans they pay off. The 'stickiness' is reinforced by the company's proprietary 'Graduator' program, which lowers interest rates for borrowers who make on-time payments, creating a strong behavioral incentive to stay within the goeasy ecosystem rather than shopping around.
The competitive position and moat of easyfinancial are entrenched by its proprietary data advantage and regulatory scale. With over three decades of lending history, goeasy has accumulated millions of repayment data points that allow it to price risk more accurately than any new entrant could hope to. This data advantage creates a barrier to entry known as 'adverse selection' for competitors—goeasy knows exactly which 'risky' looking borrowers are actually safe to lend to. Furthermore, the company benefits from significant economies of scale; its ability to raise capital through securitization and corporate notes at lower rates than smaller peers gives it a structural cost advantage. Regulatory barriers also protect the moat; recent federal moves to cap allowable interest rates (reducing the max APR to 35%) have effectively wiped out payday lenders and smaller high-cost installers, consolidating more market share to goeasy, which was already operating comfortably within those bounds.
The secondary segment, easyhome, is the company’s legacy lease-to-own business. This segment offers furniture, appliances, and electronics on weekly or monthly leasing terms, contributing roughly 9% of total revenue (152.88M). While the market size for lease-to-own in Canada is mature and shrinking slightly relative to lending, it remains a high-margin cash cow with operating margins often exceeding 20%. The competition here is limited mostly to regional players and the US-giant Aaron’s. The consumer is typically lower-income and cash-constrained, unable to afford durable goods upfront or access credit cards. While the growth here is flat, easyhome acts as a critical customer acquisition funnel. A customer who successfully pays off a furniture lease demonstrates creditworthiness and is often cross-sold into a larger, lower-rate easyfinancial loan. This internal synergy effectively lowers the customer acquisition cost for the lending business, a unique structural advantage competitors lack.
In conclusion, goeasy’s competitive edge appears highly durable due to the self-reinforcing nature of its business model. As it grows, its cost of funds decreases and its data models improve, allowing it to offer lower rates than peers while maintaining margins, which in turn attracts more reliable customers. The company has successfully navigated multiple credit cycles, including the COVID-19 pandemic, proving that its underwriting is not just aggressive but disciplined. The 'hybrid' model of physical branches for relationship-based collections and digital channels for efficiency provides a resilience that digital-only fintechs (who often struggle with collections) cannot match.
Looking forward, the resilience of the business model is supported by the counter-cyclical nature of its demand. In difficult economic times, traditional banks pull back credit availability, driving more prime and near-prime customers down the credit spectrum into goeasy’s arms. Provided the company maintains its strict underwriting discipline to manage the inevitable rise in charge-offs during such periods, its high yield (~34%) provides ample shock absorption. This combination of essential service provision, regulatory insulation, and scale economics suggests a moat that is widening rather than shrinking.
The company is profitable, generating an EPS of 2.01 in the most recent quarter, though this is significantly lower than the 5.25 seen in the previous quarter. In terms of cash, operations show a negative flow of -194 million, but this is standard for lenders because issuing a new loan counts as cash leaving the business. The balance sheet carries high leverage with a debt-to-equity ratio of 3.86x, which is typical for this industry but higher than the benchmark average. Near-term stress is visible: net income dropped over 60% in the last quarter primarily because they had to set aside more money for potential bad loans.
Revenue remains a bright spot, climbing to roughly 440 million in Q3 2025, showing the company is still successfully finding new borrowers. The operating margin is robust at roughly 42%, indicating strong pricing power and the ability to charge high interest rates on its products. However, the quality of bottom-line earnings has deteriorated recently. Net income fell to 33.09 million in Q3 from 86.54 million in Q2. This disconnect suggests that while sales are strong, the cost of risk (bad debt) is rising faster than revenue, which is a warning sign for margin sustainability.
For a consumer lender, "Cash Flow from Operations" (CFO) is often negative because the principal lent to borrowers is recorded as an outflow. In Q3, CFO was -194.18 million. The key driver was a change in net operating assets of -471.95 million, representing new loans issued. This confirms the earnings are backed by real business activity (lending), not accounting tricks. However, because the business consumes cash to grow, it does not generate positive Free Cash Flow (-195.91 million). Investors must understand this business requires constant external funding to keep the "earnings" real.
Liquidity has improved significantly, with cash and equivalents jumping to 501.91 million in Q3, up from 254.49 million in Q2. This provides a strong safety buffer. However, leverage is rising. Total debt increased to 4.76 billion, pushing the debt-to-equity ratio to 3.86x. This is noticeably ABOVE the typical non-bank lender benchmark, which is often closer to 2.5x or 3.0x. While the company is solvent, the high debt load combined with rising loan losses places the balance sheet on a "watchlist" status rather than being purely safe.
The company funds its operations primarily through debt. In Q3 alone, they issued 987 million in long-term debt while repaying 517 million, resulting in a net cash infusion. This "engine" relies on the capital markets remaining open and willing to lend to goeasy. As long as they can borrow at a lower rate than they lend to consumers (which they are currently doing), the model works. However, the heavy reliance on financing cash flow (+447 million in Q3) to offset operating outflows makes the company sensitive to interest rate spikes.
Shareholder returns are a major strength. The company pays a dividend of 1.46 per share quarterly, translating to a yield of roughly 4.65%, which is roughly 10-20% better than many financial sector peers. The payout ratio is around 36%, which is healthy and sustainable provided profits recover. Furthermore, the company is actively managing its share count, which dropped by roughly 3.8% recently, helped by 1.75 million in buybacks during Q3. This capital allocation strategy favors shareholders but adds pressure to the balance sheet.
The biggest strengths are the high yield of 4.65% and the powerful revenue engine generating 440 million per quarter. The operating margins of 42% are also impressive. However, the red flags are serious: 1) Provision for credit losses spiked to 157 million, severely hurting profits. 2) Leverage is high at 3.86x debt-to-equity. 3) Net income volatility (down 61% sequentially) shows sensitivity to the economic cycle. Overall, the foundation looks stable due to strong liquidity, but the current profit trend is risky due to rising credit costs.
Over the 5-year period from FY2020 to FY24, goeasy transformed from a mid-sized lender into a major player in Canadian non-prime credit. The most striking metric is the growth in 'Loans and Lease Receivables', which surged from 1.15 billion in FY2020 to 4.37 billion in FY24. This represents a massive expansion of their core asset base. In the last 3 years specifically, the momentum continued, with receivables growing by roughly 1.7 billion between FY22 and FY24 alone. Net income followed this trajectory, doubling from 136.5 million in FY2020 to 283.1 million in FY24.
While the 5-year trend shows aggressive compounding, the latest fiscal year (FY24) indicates the business is maturing into a consistent earnings generator rather than just a high-growth startup. Net income grew from 247.9 million in FY23 to 283.1 million in FY24, showing steady double-digit growth. This confirms that the rapid expansion observed in the earlier years has successfully translated into sustained profitability rather than resulting in operational bloat or unmanageable losses.
Since detailed revenue lines are not provided, we look at Net Income and Profitability ratios to judge performance. goeasy has demonstrated remarkable earnings quality. Net income rose in 4 of the last 5 years, with a temporary dip in FY22 (140 million) likely due to increased provisioning, before rebounding strongly to 248 million in FY23. This "check-mark" recovery proves the business is resilient even when economic conditions tighten.
In terms of efficiency, goeasy outperforms almost all peers in the Consumer Credit industry. The Return on Equity (ROE) has been stellar, clocking in at 25.11% in FY24 and 25.77% in FY23. Even in its weaker year (FY22), ROE was 16.89%, which is still respectable for a financial institution. This consistently high ROE indicates management is extremely efficient at generating profit from every dollar of shareholder capital.
The balance sheet reflects a strategy of leveraged growth. Total Assets expanded significantly from 1.5 billion in FY2020 to 5.2 billion in FY24. To fund this, Total Debt increased from 979 million to 3.71 billion. While rising debt can be a risk signal, for a lending company, debt is the "raw material" used to create loans. The Debt-to-Equity ratio has risen from 2.21 in FY20 to 3.09 in FY24. While higher, this leverage is within standard limits for a non-bank lender, provided the loan book performs well.
The company’s liquidity and capital buffers have also grown. Shareholders' Equity (the buffer against losses) nearly tripled from 443 million to 1.2 billion. This strengthening of the capital base provides a crucial safety net. The company has successfully balanced using debt to grow while building enough equity to remain solvent during downturns.
Analyzing cash flow for a lender requires nuance. goeasy shows negative Operating Cash Flow (CFO) in most years (e.g., -469 million in FY24 and -473 million in FY23). For a manufacturing company, this would be a disaster. For goeasy, this is actually a sign of growth. The negative figure is driven by the "Change in Other Net Operating Assets" (issuing new loans). Essentially, they are deploying cash to build their loan book.
However, it is vital to check if they can generate cash. In FY2020, they posted positive CFO of 74.4 million, showing that when growth was slower, the portfolio threw off cash. The company funds its negative operating cash flow through financing (issuing debt), which is standard for this industry. The consistent access to financing cash flows (572 million inflow in FY24) proves lenders are willing to back their business model.
goeasy has been very shareholder-friendly regarding dividends. The total dividends paid increased consistently: 23.89 million (FY20), 37.47 million (FY21), 51.61 million (FY22), 60.95 million (FY23), and 72.77 million (FY24). The annual dividend per share has grown aggressively from roughly 2.64 in 2021 to a projected 5.84 rate recently.
Regarding share count, the number of shares outstanding increased from 14.8 million (FY20) to 16.66 million (FY24). This indicates some dilution (~12% increase over 5 years). The company issued stock to help fund its massive loan growth, but they also engaged in small buybacks (-32 million in FY24).
Shareholders have benefited significantly despite the slight dilution. While share count rose by ~12%, Net Income grew by ~107% over the same period. This means the capital raised was used highly effectively—Earnings Per Share (EPS) grew despite there being more shares. This is "good dilution."
The dividend appears sustainable. With Net Income of 283 million and Dividends Paid of 72 million in FY24, the payout ratio is roughly 25.7%. This is a very conservative payout ratio, meaning the company retains ~75% of its earnings to reinvest in growth or pay down debt. This "Retained Earnings" growth (from 247 million in FY20 to 792 million in FY24) is the primary driver of book value creation.
goeasy's historical record is one of high-quality execution. They have managed to compound earnings and book value at a rapid pace while maintaining industry-leading profitability ratios. The biggest strength is the consistently high ROE (20%+). The main weakness to watch is the rising debt load required to fund this growth, but historically, they have managed this leverage prudently.
The Canadian non-prime consumer credit industry is undergoing a structural consolidation that will define the next 3–5 years. The most critical catalyst is the federal government's reduction of the maximum allowable annual percentage rate (APR) from 47% to 35%. This regulatory change serves as a massive tailwind for scale operators like goeasy while acting as an extinction event for smaller payday lenders and high-cost installment shops that cannot operate profitably at lower yields. Consequently, the demand for credit from the estimated 9.3 million Canadians with non-prime credit scores will not disappear; instead, it will funnel toward the few remaining players with low enough cost of capital to serve them. Expect the addressable market for near-prime and non-prime lending to grow at a CAGR of roughly 5-7%, driven largely by population growth and immigration, as new Canadians often lack the credit history required by 'Big 6' banks.
Competitive intensity is bifurcating. Entry for new competitors is becoming significantly harder due to the capital requirements needed to survive at lower yields and the sophisticated compliance infrastructure now required. While traditional banks are retrenching and tightening underwriting standards to protect their balance sheets from recessionary risks, goeasy is stepping into this void. The industry is seeing a shift where volume is moving away from storefront-only payday models toward omnichannel (digital + branch) installment lending. With an expected total consumer credit market expansion, goeasy’s ability to secure funding at lower rates than fintech peers positions it to capture outsized market share.
1) Current Consumption:
Currently, this is the company's growth engine, with a gross consumer loans receivable balance of $5.44B. Usage is intense among working-class Canadians needing debt consolidation or emergency funds. Consumption is currently limited only by goeasy's strict underwriting box—they reject a significant portion of applicants to maintain portfolio quality, focusing on those with the ability to repay rather than just the need for cash.
2) Consumption Change (3–5 years): Consumption will increase significantly in the 'secured' lending tier (loans backed by home equity or assets). As the 35% APR cap forces the company to move slightly up-market, they will target borrowers graduating from high-interest unsecured products to lower-rate secured loans. The unsecured segment for higher-risk borrowers will see a decrease in yield but an increase in volume as displaced payday loan customers seek alternatives. Consumption will rise due to the 'Big 6' banks rejecting more applicants. A key catalyst will be the continued integration of digital lending, reducing funding time to minutes.
3) Numbers:
$200B in outstanding balances.$3.34B (TTM), and this is expected to grow as the portfolio targets $6B+.~31.40% and will likely compress slightly to 28-30% as the product mix shifts to lower-risk borrowers.4) Competition:
Customers choose goeasy over banks because banks simply say 'no'. Against competitors like Fairstone, goeasy wins on speed and digital convenience. A customer needing funds for an emergency repair will choose the provider that funds in 30 minutes over one that takes 3 days. goeasy outperforms here due to its automated decisioning. If goeasy does not lead, share will likely go to Fairstone or credit unions, though goeasy’s branch network provides a trust advantage.
1) Current Consumption: This segment focuses on financing powersports, healthcare procedures, and home improvements directly at the merchant. Current usage is growing but is constrained by merchant acquisition—goeasy must physically or digitally integrate with thousands of independent retailers and dealerships.
2) Consumption Change (3–5 years): This is the highest growth potential vertical. Consumption will increase in the 'indirect' channel, where the borrower interacts with the merchant, not goeasy directly. The mix will shift heavily toward automotive and powersports as supply chains normalize. Reasons for the rise include merchants aggressively seeking financing partners to save sales as consumer discretionary budgets tighten. A major catalyst would be signing a large national partner (e.g., a major retail chain) for exclusive financing.
3) Numbers:
$5.44B portfolio.15-20% annually as they penetrate the auto vertical further.4) Competition: Merchants choose a financing partner based on 'approval rates'. If a merchant sends 10 customers to a lender and 8 are rejected, the merchant loses sales. goeasy wins because its non-prime expertise allows it to approve customers that prime lenders (like TD or RBC) reject, helping the merchant close the sale. goeasy outperforms by offering a 'second-look' program where they pick up the declines from prime lenders seamlessly.
1) Current Consumption:
This legacy business generates roughly $152.88M in revenue. Usage is stable but mature, limited by the declining popularity of leasing furniture compared to 'Buy Now Pay Later' (BNPL) options and the general affordability of electronics.
2) Consumption Change (3–5 years): Consumption here will likely remain flat or decrease slightly as a percentage of total revenue. The shift is tactical: this segment is not for growth, but for acquisition. The customer base here (no credit) will shift into the lending segment (easyfinancial) as they establish payment history. Growth is constrained by the physical logistics of moving furniture and high product costs.
3) Numbers:
$150M annually with margins (~20%+) being the focus over volume.4) Competition: Customers choose easyhome because they have literally no other option to acquire essential goods (fridge, bed) without cash. goeasy leads this niche against Rent-A-Center due to its Canadian footprint dominance. However, the risk is customers shifting to BNPL apps like Affirm/Klarna if they can qualify.
The number of companies in the Canadian non-prime lending vertical will decrease over the next 5 years. Reasons include: 1) The 35% APR cap destroys the unit economics for sub-scale lenders who rely on 45%+ rates to cover losses. 2) Rising cost of capital makes it impossible for private lenders to fund loans profitably compared to goeasy’s low-cost securitization abilities. 3) Regulatory compliance costs are rising, favoring large platforms. This consolidation creates an oligopoly where goeasy and Fairstone become the dominant non-bank options.
1. Credit Degradation from Unemployment Spikes
Why: goeasy lends to non-prime borrowers who are most vulnerable to layoffs. A rise in Canada's unemployment rate above 8% would directly impact their customer base.
Impact: This would hit consumption by forcing goeasy to tighten approvals, slowing origination growth, and increasing provision for credit losses, reducing earnings.
Probability: Medium. While Canada's economy is softening, massive structural unemployment is not currently in the base case forecast.
2. Funding Cost Volatility Why: goeasy relies on debt markets to fund its loans. If bond yields remain stickier/higher for longer, their spread (profit) compresses. Impact: To maintain margins, they might have to raise rates (hard with the cap) or accept lower margins, which slows capital reinvestment. Probability: Low. goeasy has successfully laddered its debt maturities and uses securitization to lock in lower rates relative to peers.
Looking beyond products, goeasy's investment in AI-driven credit modeling is a hidden asset for future growth. By automating the verification of income and banking data, they are reducing the 'friction' cost of originating a loan. This efficiency gain allows them to remain profitable even as yields compress due to regulation. Furthermore, their balance sheet strength (with undrawn capacity) allows them to act as a consolidator—acquiring loan portfolios from failing competitors over the next 3 years is a distinct possibility that would step-change their growth.
Current market pricing places goeasy in the lower third of its 52-week range at C$132.46, reflecting recent pessimism despite strong underlying business performance. The stock trades at a trailing P/E of 10.0x and a forward P/E of 7.1x, multiples that are significantly compressed compared to its historical averages and industry peers. Analyst consensus sees an average upside of nearly 50%, with price targets centering around C$196, suggesting that professional sentiment remains bullish on the company's ability to navigate economic headwinds. Intrinsic value models based on earnings growth corroborate this view, estimating a fair value range between C$195 and C$225. This valuation is supported by a robust dividend yield of over 4.2% and active share buybacks, creating a combined shareholder yield exceeding 5%. The company's ability to generate returns on equity above 20% contrasts sharply with its discounted valuation, implying that the market is pricing in a severe deterioration in credit quality that has not fully materialized in the company's long-term earnings power. Triangulating these factors—analyst targets, intrinsic value, and peer multiples—results in a fair value midpoint of C$200. This presents a significant margin of safety for investors. The analysis suggests a strong 'Buy' zone below C$150, where the risk-reward profile is most favorable, driven by the disconnect between the company's fundamental economic engine and its current market price.
In 2025, investor-WARREN_BUFFETT views goeasy Ltd. (GSY) as a classic "wonderful business at a fair price" operating within a distinct circle of competence. The investment thesis rests on goeasy's dominant position in the Canadian non-prime lending market, where recent federal regulatory caps on interest rates (limiting APR to 35%) have effectively acted as a moat, wiping out smaller, less efficient payday lenders and consolidating market share for goeasy. Investor-WARREN_BUFFETT appreciates the company's discipline in moving toward "near-prime" and secured lending (automotive and home equity), which improves the quality of the loan book while maintaining high returns. A key appeal is the company's consistent ability to compound value; goeasy has delivered an Return on Equity (ROE) consistently above 20% for nearly a decade, far exceeding the industry average of 12–15%, proving its ability to reinvest earnings efficiently. However, risks remain regarding the Canadian consumer's debt levels; a sharp spike in unemployment could test their underwriting models, as Net Charge-Offs (NCOs) historically hover around 8–10%. Despite this, the company's conservative leverage (Net Debt to EBITDA of ~2.5x) and long history of dividend growth (increasing dividends for 10+ consecutive years) signal trustworthy management. Consequently, investor-WARREN_BUFFETT would likely buy this stock today as a long-term compounder. If forced to choose the three best stocks in this sector, investor-WARREN_BUFFETT would select American Express (AXP) for its unmatched brand moat and high-spend customer base, goeasy (GSY) for its growth runway and regulatory dominance in Canada, and OneMain Holdings (OMF) for its sheer scale and cash-generation capability. Investor-WARREN_BUFFETT would reconsider this position if Net Charge-Offs structurally exceeded 12% or if management veered into risky, unrelated acquisitions.
Investor-CHARLIE_MUNGER would view goeasy Ltd. (GSY) in 2025 as a textbook 'lollapalooza' effect where a dominant market position, high return on equity, and rational management combine to create a compounding machine. While the consumer credit industry is often plagued by 'stupidity' and bad incentives, goeasy distinguishes itself by dominating the Canadian non-prime niche with a scale advantage that creates a durable moat against fragmented payday lenders and regulated banks. The investor would be impressed by the company's ability to generate a Return on Equity (ROE) consistently above 20%, far outstripping the cost of capital, while reinvesting retained earnings into a loan book growing at roughly 20% annually. A key risk remains regulatory intervention—specifically the federal APR cap reduction to 35%—but goeasy has already adapted its cost structure to survive where smaller competitors cannot, effectively turning a regulatory hurdle into a barrier to entry. In today's market, where high-quality compounders are often overpriced, goeasy trading at a P/E of roughly 10x offers the requisite 'margin of safety' alongside growth. Consequently, investor-CHARLIE_MUNGER would likely buy this stock, seeing it as a 'great business at a fair price' that can be held for the long term. If forced to suggest the three best stocks in this sector, investor-CHARLIE_MUNGER would choose goeasy (GSY) for its compounding growth and Canadian dominance, OneMain Holdings (OMF) for its sheer scale and yield safety in the US, and Enova International (ENVA) for its aggressive share buybacks ('cannibal' behavior) and algorithmic efficiency. The decision to hold GSY would only change if management ventured into 'too hard' piles like unrelated acquisitions or if net charge-offs structurally exceeded 12%, indicating a breakdown in underwriting discipline.
Investor-Bill_Ackman would view goeasy Ltd. as a textbook 'high-quality compounder' operating a simple, predictable, and dominant business in the Canadian lending market. He would be attracted to the company's functional oligopoly status, which allows it to generate a Return on Equity (ROE) consistently above 20%, significantly outperforming the industry average of 12-15%. The business fits his preference for strong moats; unlike the fragmented US market, goeasy’s network of 400+ branches creates a formidable barrier to entry, protecting its margins. He would highlight the impressive revenue growth of ~20% annually as evidence of pricing power and execution, even as the company adapts to the federal APR cap of 35%. A key risk he would monitor is the net charge-off rate; while currently manageable at 8.5%-10.5%, a spike above historical norms would signal underwriting decay in a 2025 recession scenario. Management's capital allocation aligns with shareholder interests, primarily reinvesting cash into the loan book at high internal rates of return, while simultaneously growing the dividend (yielding ~2.5-3%) and maintaining conservative leverage of ~2-3x Net Debt/EBITDA compared to US peers like OneMain at ~5-6x. Consequently, investor-Bill_Ackman would likely initiate a long position, viewing the valuation of ~10x forward earnings as an attractive entry for a company doubling its intrinsic value every few years. If forced to choose the three best stocks in this ecosystem, he would select goeasy (GSY) for its superior growth and Canadian dominance, OneMain (OMF) for its defensive scale and ~9% dividend yield, and Enova (ENVA) for its relentless efficiency and share buybacks, as these three represent the undisputed leaders in their respective lanes. He would likely reverse his decision only if regulatory changes made the non-prime lending model structurally unprofitable or if credit losses permanently breached the 12% threshold.
goeasy Ltd. operates in a distinct niche within the Canadian financial services sector. Unlike the United States, where the non-prime lending market is fragmented among numerous regional and national players (like OneMain, Enova, and Regional Management), the Canadian landscape is dominated by the 'Big Five' banks which generally avoid non-prime unsecured lending. This creates a massive structural gap—a 'moat'—that goeasy has effectively consolidated. By transitioning from payday-style loans to lower-interest, longer-term installment loans (branded primarily under easyfinancial), goeasy has improved its credit quality profile while maintaining pricing power that traditional banks cannot replicate. This structural advantage allows GSY to consistently generate Returns on Equity (ROE) above 20%, a figure that is hard for fragmented US peers to maintain without taking on excessive credit risk.
Compared to its competition, goeasy is characterized by its hybrid delivery model. While fintech competitors like Enova or Upstart rely almost exclusively on algorithms and online acquisition, goeasy maintains a robust physical branch network alongside its digital channels. This 'omnichannel' approach allows for better underwriting and collections performance during economic downturns, as face-to-face relationships often result in lower default rates. Furthermore, goeasy's recent expansion into automotive financing (LendCare) and point-of-sale consumer leasing diversifies its risk better than peers like World Acceptance Corp, which remain heavily tied to traditional personal loans. This diversification makes GSY less sensitive to a single type of credit shock compared to monoline lenders.
However, the company is not without comparative disadvantages. Its heavy concentration in the Canadian market exposes it entirely to the Canadian consumer's high leverage and mortgage stress, whereas US peers operate in a deeper, more resilient economy. Additionally, because goeasy is a 'growth' story in a sector typically valued for 'value' and 'yield' (like OneMain), it tends to trade at higher Price-to-Earnings multiples. This means that if growth slows or credit losses spike—a common risk in the 'Consumer Credit & Receivables' sub-industry—GSY's stock price has further to fall in terms of valuation compression than its cheaper US counterparts.
Paragraph 1 → OneMain (OMF) is the closest strategic peer to goeasy, serving as the bellwether for non-prime lending in the United States. While both companies target the same near-prime customer demographic, OneMain is a mature, yield-focused cow, whereas goeasy is a growth-focused compounder. OMF is significantly larger by market cap and loan book size, offering stability and massive capital returns to shareholders. However, goeasy is the stronger growth story, consistently expanding its loan book at double-digit rates compared to OneMain's single-digit growth. If you want safety and income, OMF is the choice; if you want capital appreciation, GSY wins, though it carries higher valuation risk.
Paragraph 2 → In terms of Business & Moat, Brand: OMF is the dominant US brand with over 1,300 branches; GSY dominates Canada with 400+ locations. Scale: OMF's scale is vastly superior ($20B+ receivables vs. GSY's ~$4B), allowing cheaper funding. Switching Costs: Both have stickiness via renewed loans, but GSY's 'Graduation' program (lowering rates for good payment) creates better loyalty. Regulatory: GSY faces a single federal cap (reduced to 35% APR), which it has already adapted to; OMF navigates 50 different state laws. Winner: OneMain overall. Reason: The sheer scale and diversity of OMF's funding sources across the US ABS market provide a deeper, more durable economic moat than GSY's Canadian concentration.
Paragraph 3 → Financial Statement Analysis reveals different priorities. Revenue Growth: GSY wins (20%+ vs OMF ~4-6%), driven by Canadian market share gains. Margins: OMF wins on Net Margin (~15-20%) due to scale efficiency, while GSY reinvests more for growth. ROE: Both are elite, often exceeding 20%, making them better than bank averages (~12-15%). Liquidity/Leverage: OMF runs higher leverage (~5-6x Net Debt/EBITDA) to juice returns; GSY is more conservative (~2-3x). Dividend: OMF offers a massive yield (~8-9% vs GSY ~2.5-3%), but GSY grows the dividend faster. Overall Financials winner: goeasy. Reason: While OMF yields more, GSY's superior organic revenue growth and cleaner balance sheet (lower leverage) offer better long-term compounding potential.
Paragraph 4 → Past Performance highlights the growth premium. Over the period 2019–2024, Revenue CAGR: GSY (~19%) crushed OMF (~4%). EPS Growth: GSY grew earnings consistently; OMF earnings have been volatile due to reserve builds and buybacks. TSR: GSY provided significantly higher Total Shareholder Return (~150%+) compared to OMF (~50-60% range), despite OMF's high dividend. Risk: OMF had a sharper drawdown during banking scares due to its funding model perception. Winner: goeasy. Reason: GSY has proven to be a multi-bagger growth stock, significantly outperforming the sector average and OMF in total return.
Paragraph 5 → Future Growth drivers diverge sharply. TAM: GSY has significant runway in Canada by stealing share from payday lenders and entering auto/POS ($200B non-prime market); OMF is largely penetrating a saturated US market. Product Expansion: GSY's 'LendCare' acquisition is driving point-of-sale growth; OMF is slowly rolling out credit cards (Brightway). Cost Efficiency: OMF is cutting costs to maintain margins; GSY is leveraging operating leverage to expand margins. Yield: OMF's yield on receivables is stable; GSY's is compressing (regulatory change) but offset by volume. Winner: goeasy. Reason: GSY is still in the 'expansion' phase of its lifecycle with clear double-digit growth guidance, whereas OMF is in the 'optimization' phase.
Paragraph 6 → Fair Value assessment requires adjusting for growth. P/E Ratio: GSY trades at a premium (~9-11x forward earnings) versus OMF (~7-8x). Dividend Yield: OMF (~9%) is far superior to GSY (~3%) for income. PEG Ratio: GSY looks cheaper when factoring in growth (PEG < 1.0 in many models). Quality: GSY's credit performance has remained stable despite rapid growth. Value Today: OneMain (OMF) is better value for pure income investors, but goeasy (GSY) is fair value for growth. Winner: OneMain. Reason: strictly on a risk-adjusted valuation basis, OMF is priced for disaster and pays you to wait, whereas GSY requires execution perfection to justify its multiple.
Paragraph 7 → Winner: goeasy over OneMain for total return investors, but OneMain for income investors. GSY demonstrates superior revenue velocity (20%+ growth) and balance sheet conservatism (lower leverage), which outweighs OMF's scale advantage in the current high-rate environment. However, GSY's weakness is its valuation premium (~10x PE vs OMF ~7x), meaning any slip in credit quality will be punished severely. OMF's risk is its low growth ceiling, effectively acting as a bond proxy. Verdict: I choose GSY because distinct market leadership in Canada provides a clearer path to double-digit earnings expansion than OMF's saturated battleground in the US.
Paragraph 1 → Enova (ENVA) represents the fintech/digital end of the spectrum compared to goeasy's hybrid branch-digital model. ENVA operates brands like CashNetUSA and NetCredit, relying heavily on AI/Machine Learning for underwriting without physical branches. While ENVA is a powerhouse in generating cash and buying back stock, it lacks the tangible customer relationship stability that GSY's branch network provides. GSY is a 'compounder' paying dividends; ENVA is a 'cannibal' utilizing all cash flow for share repurchases. GSY offers a balanced approach, while ENVA is a higher-beta play on tech-enabled lending.
Paragraph 2 → Business & Moat comparison favors the physical. Brand: GSY has high visibility via storefronts; ENVA is largely transactional/online-only. Switching Costs: GSY's graduation to lower rates creates loyalty; ENVA customers are highly price-sensitive and churn faster. Scale: ENVA has massive data advantages (60M+ transactions analyzed) for algorithmic underwriting. Regulatory: ENVA faces higher regulatory scrutiny regarding online lending rates in various US states; GSY operates in a unified federal framework. Winner: goeasy. Reason: The physical branch network acts as a barrier to entry and improves collection rates during distress, a 'moat' that pure-play digital lenders like ENVA lack.
Paragraph 3 → Financial Statement Analysis shows two potent models. Revenue Growth: Both are strong, but ENVA's recent growth (~10-15%) is driven by SMB lending; GSY (~20%) is consumer-led. Margins: GSY boasts higher Operating Margins (~35%+) compared to ENVA (~20-25%) because physical branches actually lower customer acquisition costs compared to expensive digital ads. ROE: ENVA is incredibly efficient (ROE > 25%) due to asset-light model. Dividends: GSY pays ~3%; ENVA pays 0% (all buybacks). Liquidity: ENVA has shorter-duration funding matching short-term loans. Overall Financials winner: Enova. Reason: ENVA's ability to generate massive ROE with zero tangible capital (branches) and its aggressive share reduction (~5-10% float reduction/year) is financially superior efficiency.
Paragraph 4 → Past Performance highlights strategy differences. Growth: Over 2020–2024, ENVA revenue doubled, matched closely by GSY. TSR: ENVA stock has been volatile, heavily punished in 2022, but rebounded strongly. GSY has been a steadier climber but also saw a ~40% drawdown in 2022. Risk: ENVA's beta is generally higher. Winner: Tie. Reason: Both companies have successfully navigated the post-COVID credit cycle, delivering strong returns, though via different capital allocation strategies (Buybacks for ENVA vs. Dividends/Growth for GSY).
Paragraph 5 → Future Growth depends on the economy. TAM: ENVA has a massive SMB (Small Business) lending opportunity which GSY lacks. GSY is focused purely on Canadian consumer/auto. Drivers: ENVA is expanding into broader near-prime segments; GSY is consolidating the sub-prime segment. Recession Risk: ENVA's short-term loans can be adjusted quickly (stop lending instantly); GSY has longer-duration loans on books. Winner: Enova. Reason: The SMB lending diversity and the agility of an online-only model allow ENVA to pivot faster in a changing economic landscape than GSY's fixed-cost branch model.
Paragraph 6 → Fair Value analysis. P/E Ratio: ENVA is perpetually cheap, often trading at ~6-7x forward earnings due to 'regulatory regulatory' fears. GSY trades at ~9-11x. Value: ENVA is buying back its own stock at a 15% earnings yield, which creates a floor. Metric: P/E to Growth, ENVA is arguably cheaper. Winner: Enova. Reason: The market assigns a 'fintech discount' to ENVA that is unwarranted given its profitability, making it a better pure 'value' play than the premium-priced GSY.
Paragraph 7 → Winner: goeasy over Enova for conservative investors, Enova over goeasy for aggressive value. GSY's dividend growth and branch moat make it a more defensible holding for a long-term portfolio, whereas ENVA's lack of dividend and regulatory volatility make it a trade. GSY's key strength is the omnichannel collection advantage—it's harder to ghost a local branch manager than a website. However, ENVA's valuation (~6x PE) offers a higher margin of safety than GSY (~10x PE). Verdict: I select GSY because the Canadian regulatory environment is currently more settled than the US fintech lending space, reducing the 'stroke of a pen' risk that hangs over Enova.
Paragraph 1 → Regional Management (RM) is a direct 'mini-me' comparable to goeasy but located in the US. Like GSY, RM operates a branch-based model for installment loans. However, RM operates in the shadow of giants like OneMain, whereas GSY is the giant in its market. Comparing the two exposes the difference between a market leader (GSY) and a smaller competitive player (RM). GSY exhibits stronger pricing power and credit control, while RM has struggled more with inflationary pressures affecting its borrower base, leading to higher credit loss provisions relative to its size.
Paragraph 2 → Business & Moat assessment is a mismatch. Scale: GSY ($3B CAD market cap) dwarfs RM ($250M USD market cap). Brand: GSY is a household name in its niche; RM is a generic regional player. Regulatory: RM operates in multiple states with varying laws; GSY has one main federal law. Network: GSY's 400+ locations have high per-branch profitability; RM's footprint is less efficient. Winner: goeasy. Reason: Being the 'Category Killer' in Canada provides GSY with scale economies and funding advantages that RM simply cannot achieve as a small fish in the US pond.
Paragraph 3 → Financial Statement Analysis reinforces the scale advantage. Revenue Growth: GSY (~20%) outpaces RM (~5-8%). Net Margin: GSY consistently posts margins in the 20-30% range; RM struggles to maintain 10-15% due to higher relative overhead. Loss Rates: RM has seen Net Charge-Offs (NCOs) tick up towards 10-11% recently; GSY manages to keep NCOs in the 8-10% range despite a similar customer profile. Dividend: RM yields ~4%, GSY ~3%, but GSY's coverage is safer. Overall Financials winner: goeasy. Reason: Superior margins and better absorption of credit losses due to higher revenue yields make GSY financially more robust.
Paragraph 4 → Past Performance is telling. TSR: Over 2019–2024, GSY stock tripled; RM stock is largely flat or down. Volatility: RM is highly volatile and illiquid compared to GSY. Earnings: RM has had several quarters of earnings misses or sharp declines due to provisioning; GSY has been a consistent 'beat-and-raise' machine. Winner: goeasy. Reason: The market has rewarded GSY's consistency, while RM has been in the 'penalty box' due to erratic credit performance.
Paragraph 5 → Future Growth outlook. Pipeline: RM is expanding geographically in the US but faces fierce competition from OMF and fintechs. Diversification: GSY has successfully diversified into Auto and POS; RM remains largely an installment lender. Funding: GSY has access to cheaper capital relative to its size than RM. Winner: goeasy. Reason: GSY has multiple levers for growth (new products, new verticals), while RM is fighting a trench war for market share in existing geographies.
Paragraph 6 → Fair Value. P/E Ratio: RM trades at a depressed multiple (~5-6x) reflecting high risk and low liquidity. GSY trades at ~10x. Book Value: RM trades near or below tangible book value (distressed pricing); GSY trades at a healthy premium to book (~2-3x). Metric: Risk-Adjusted Return. Winner: goeasy. Reason: While RM is 'statistically' cheaper, it is a value trap unless credit conditions improve perfectly. GSY is 'fairly' priced for a quality compounder.
Paragraph 7 → Winner: goeasy over Regional Management. The comparison highlights the value of market dominance. GSY controls its destiny in Canada, whereas RM is a price-taker in the US. GSY's superior net margins and diversified loan book (Auto/POS) provide a cushion against default waves that RM lacks. RM's primary risk is its small scale, making it vulnerable to funding liquidity dry-ups. Verdict: GSY is an institutional-grade company; RM is a speculative micro-cap play.
Paragraph 1 → World Acceptance (WRLD) is an old-school, deep-subprime lender. Unlike goeasy, which has moved 'up-market' to near-prime borrowers with larger loans and lower rates (averaging ~30-35%), WRLD focuses on small-dollar, high-interest loans (often 50-100% APR where legal). This makes WRLD much riskier from a regulatory standpoint. GSY is a modern, diversified lender; WRLD is a traditional finance company facing constant existential threats from regulators (CFPB). GSY is the 'cleaner' shirt in the laundry.
Paragraph 2 → Business & Moat differences are regulatory. Regulatory Barriers: WRLD is constantly fighting capped rate legislation in the US; GSY voluntarily lowered its APRs below 35% to align with new Canadian laws, removing regulatory overhang. Brand: WRLD has deep community roots but suffers from 'predatory' stigma. Scale: WRLD has many branches (1,000+) but low revenue per branch compared to GSY. Winner: goeasy. Reason: GSY has successfully pivoted its business model to be regulatory-compliant and sustainable, whereas WRLD is fighting to preserve a high-rate model that is falling out of favor.
Paragraph 3 → Financial Statement Analysis. Revenue: GSY's revenue growth (~20%) dwarfs WRLD (often flat to low single digits). Margins: WRLD has volatile margins heavily impacted by credit cycles; GSY's operating leverage is superior. Shareholder Returns: WRLD does not pay a dividend, relying on buybacks; GSY is a dividend grower (~3% yield). Balance Sheet: WRLD often carries less debt but has limited access to institutional capital markets compared to GSY. Overall Financials winner: goeasy. Reason: Predictability and growth. WRLD's financials are erratic; GSY's are a steady upward line.
Paragraph 4 → Past Performance. Stock Price: WRLD had a massive run-up in 2021 due to a short squeeze but has since languished. GSY has been a consistent long-term winner. Risk: WRLD has a very high beta and is often targeted by short sellers alleging regulatory violations. Winner: goeasy. Reason: GSY provides sleep-at-night quality; WRLD is a battleground stock.
Paragraph 5 → Future Growth. Catalysts: WRLD has few growth drivers other than opening more branches in friendly states. GSY has a clear roadmap: auto loans, retail financing, and capturing prime-rejects from banks. ESG: GSY scores better on ESG metrics by lowering rates for borrowers over time; WRLD is often excluded by ESG funds. Winner: goeasy. Reason: WRLD is fighting secular headwinds (regulation, anti-predatory sentiment); GSY is riding secular tailwinds (tight bank credit).
Paragraph 6 → Fair Value. Valuation: WRLD often trades at 8-10x earnings, similar to GSY, which is puzzling given the quality disparity. Metric: PEG Ratio. GSY is vastly superior. Yield: GSY pays you to wait; WRLD offers nothing. Winner: goeasy. Reason: There is no reason to pay a similar multiple for WRLD's stagnant growth and high regulatory risk when you can own GSY's growth and dividend.
Paragraph 7 → Winner: goeasy over World Acceptance. This is a choice between a modernized lender (GSY) and a legacy operator (WRLD). GSY's dividend growth and strategic pivot to lower-rate, larger-size loans have secured its future. WRLD's weakness is its reliance on small-dollar, ultra-high-interest loans, a segment under constant regulatory attack. Verdict: GSY is investable for the long term; WRLD is a speculative trade on regulatory outcomes.
Paragraph 1 → Bread Financial (BFH), formerly Alliance Data, focuses on private label credit cards and 'Buy Now, Pay Later' (BNPL) solutions. While GSY lends cash directly to consumers, BFH facilitates spending at retailers (e.g., Victoria's Secret, Dell). BFH is tied to consumer discretionary spending, while GSY is tied to consumer liquidity needs. In a recession, people stop buying clothes (hurting BFH) but still need cash for rent/repairs (helping demand for GSY). GSY controls the customer relationship; BFH is dependent on retail partners.
Paragraph 2 → Business & Moat. Network Effects: BFH has strong retailer partnerships, but retailers churn (switch providers). Brand: BFH is B2B2C (hidden behind retailer brand); GSY is B2C (direct brand). Switching Costs: Low for BFH (retailers leave for better terms); Moderate for GSY (borrowers stay for funds). Scale: BFH handles massive transaction volume ($30B+ receivables). Winner: goeasy. Reason: GSY owns its customer and distribution channel (branches/web); BFH is a vendor subject to the whims of big retail partners.
Paragraph 3 → Financial Statement Analysis. Credit Quality: BFH has seen NCOs spike to ~8% recently, hurting profitability. Margins: GSY has higher Net Margins (~20%) compared to BFH (~10-12%). Capital: BFH is rebuilding capital after spinning off assets; GSY is fully capitalized. Dividend: BFH pays a small dividend (~2%); GSY pays higher (~3%) with better growth. Overall Financials winner: goeasy. Reason: GSY's earnings quality is higher; BFH's earnings are volatile and dependent on credit card master trust performance.
Paragraph 4 → Past Performance. TSR: BFH stock has been a disaster over the last 5 years (-50% or worse) due to restructuring and credit fears. GSY has been a multibagger. Volatility: BFH crashed hard in 2022/2023. Winner: goeasy. Reason: Absolute dominance in total return. BFH has been a 'turnaround story' that hasn't fully turned.
Paragraph 5 → Future Growth. Drivers: BFH grows with retail sales volume; GSY grows with credit tightening. Headwinds: BFH faces the 'CFPB Late Fee' rule which could slash revenue; GSY is largely immune to US credit card fee rules. Opportunity: BFH is optimizing its portfolio (dropping risky retailers); GSY is expanding. Winner: goeasy. Reason: BFH is playing defense; GSY is playing offense.
Paragraph 6 → Fair Value. P/E Ratio: BFH trades extremely cheaply (~4-5x earnings) because the market fears its balance sheet and late-fee regulation impact. GSY trades at ~10x. Risk/Reward: BFH has massive upside if it survives and thrives, but massive risk. Winner: Bread Financial (for deep value). Reason: If you believe the US consumer remains strong, BFH is mispriced. GSY is fully priced. However, for quality, GSY wins.
Paragraph 7 → Winner: goeasy over Bread Financial. GSY offers stability and control, whereas BFH is a derivative of retail health and regulatory whims. GSY's direct-to-consumer model allows it to price for risk effectively, whereas BFH is often squeezed by retailer partners demanding better terms. BFH's primary risk is the regulatory cap on late fees, which hits its core profit engine. Verdict: GSY is the superior business; BFH is merely a cheap stock.
Paragraph 1 → ECN Capital (ECN) is a Canadian peer but operates a different model: it originates and manages credit assets (like manufactured housing loans and RV loans) for institutional partners rather than holding them on balance sheet like goeasy. ECN is an 'asset-light' manager; GSY is a 'balance sheet' lender. While ECN's model theoretically lowers credit risk, execution has been poor, leading to volatile earnings and stock crashes. GSY has taken the credit risk but managed it superbly, delivering superior results.
Paragraph 2 → Business & Moat. Scale: GSY is a large cap ($3B); ECN has shrunk to a small cap. partnerships: ECN relies on institutional buyers for its loans; if buyers step away, ECN is stuck. GSY funds itself and lends directly. Complexity: ECN's business is complex and hard to model; GSY is simple (lend money, collect money). Winner: goeasy. Reason: Simplicity and self-reliance. GSY controls its own funding and lending destiny.
Paragraph 3 → Financial Statement Analysis. profitability: GSY is highly profitable (EPS ~$15+). ECN has struggled to generate consistent GAAP profits recently due to write-downs. Dividend: ECN cut its dividend or paid in shares recently to preserve cash; GSY increased its dividend. Leverage: ECN has battled high leverage; GSY remains prudent. Overall Financials winner: goeasy. Reason: GSY generates cash; ECN burns it or shuffles it.
Paragraph 4 → Past Performance. Return: GSY is near all-time highs; ECN trades at a fraction of its former highs. Credibility: ECN management has lost investor trust due to missed guidance; GSY management exceeds guidance. Winner: goeasy. Reason: Complete divergence in performance.
Paragraph 5 → Future Growth. Strategy: ECN is reviewing strategic alternatives (potential sale/breakup); GSY is executing a long-term growth plan. Winner: goeasy. Reason: Going concern vs. restructuring story.
Paragraph 6 → Fair Value. Valuation: ECN is hard to value due to uncertainty. GSY is valued on earnings. Winner: goeasy. Reason: You can't value what you can't predict (ECN).
Paragraph 7 → Winner: goeasy over ECN Capital. This is a mismatch between a compounder (GSY) and a broken story (ECN). GSY's consistent execution and transparent business model make it investable. ECN's reliance on third-party funding markets and its history of strategic pivots make it uninvestable for the average retail investor. Verdict: Avoid ECN until it stabilizes; buy GSY for the growth.
Based on industry classification and performance score:
goeasy Ltd. is the dominant non-prime consumer lender in Canada, effectively bridging the gap between traditional banks and high-cost payday lenders. Its core business, easyfinancial, drives over 90% of revenue with impressive yields and a proprietary underwriting model that has proven resilient across economic cycles. The company benefits from a wide competitive moat built on decades of repayment data, a hybrid branch-digital network, and superior funding costs compared to peers. Investor Takeaway: Positive.
Decades of proprietary repayment data allow goeasy to price risk accurately where competitors are flying blind.
The core of goeasy's moat is its underwriting engine, which utilizes over 30 years of proprietary data on non-prime consumer behavior. While standard credit scores (FICO) are static, goeasy's custom models analyze thousands of data points to predict repayment probability for borrowers with 'bruised' credit. This allows them to maintain a stable yield (~31-34%) while keeping net charge-offs within a predictable target range (typically 8-10%). This data advantage creates a virtuous cycle: better models lead to lower losses, which allow for more competitive rates, which attract better borrowers. Competitors lacking this historical data cannot replicate this risk-adjusted pricing without suffering significant initial losses.
goeasy possesses a sophisticated, bank-like funding structure that is far superior to typical subprime lenders.
Unlike many alternative lenders that rely on expensive private credit or equity to fund loans, goeasy has achieved a mature capital structure comparable to larger financial institutions. The company utilizes a mix of securitization facilities, secured borrowings, and unsecured senior notes. This access to public debt markets allows them to lower their weighted average cost of borrowing, which is a critical advantage when their product is money itself. By maintaining ample undrawn capacity and diverse funding sources, they avoid the liquidity crunches that often bankrupt smaller lenders during credit tightening cycles. Their ability to generate substantial internal cash flow (Operating Income of 637.30M TTM) further reduces dependency on external capital markets.
A hybrid model combining centralized digital tools with over 400 local branches ensures superior collection performance.
In the non-prime lending space, the ability to collect is just as important as the ability to lend. goeasy operates a unique 'omni-channel' model where branch staff are involved in both origination and collections. This creates a personal relationship with the borrower that purely digital fintechs cannot match. If a borrower misses a payment, they are contacted by the local person who issued the loan, significantly improving 'cure rates' (getting a delinquent borrower back on track). The scale of their gross consumer loans receivable (5.44B) allows them to invest heavily in predictive dialing and digital payment tools, ensuring that their cost to collect remains efficient relative to the high yield they generate.
Recent federal interest rate caps serve as a barrier to entry that favors goeasy's scale while eliminating smaller, predatory competitors.
The Canadian regulatory environment has tightened, specifically with the reduction of the maximum allowable annual percentage rate (APR) to 35% (down from 47%). Far from being a negative, this regulation acts as a massive moat for goeasy. While payday lenders cannot survive at 35% APR due to their high default rates and operational costs, goeasy's average yield is already below this cap (~31-34%). This regulatory change effectively clears the field of high-cost competitors, consolidating market share to the most efficient operator. goeasy's compliance infrastructure and nationwide licensing are mature, whereas new entrants face high hurdles to establish similar compliant operations across all provinces.
The acquisition of LendCare and expansion into Point-of-Sale (POS) financing has secured critical exclusive channels in powersports and retail.
Through its easyfinancial and LendCare brands, goeasy has established deep integrations with thousands of merchants across Canada, particularly in the powersports, home improvement, and healthcare verticals. These merchants rely on goeasy to finance customers who are rejected by prime lenders (banks). This relationship creates high switching costs; once a merchant integrates goeasy's financing platform into their checkout process, they are unlikely to switch unless a competitor can offer significantly higher approval rates. The 'stickiness' is evidenced by the growth in their indirect lending portfolio. This B2B2C channel diversifies their origination funnel beyond just direct-to-consumer marketing, embedding them into the transaction flow of high-ticket purchases.
goeasy Ltd. demonstrates strong top-line growth but faces rising costs associated with bad loans. While revenue has grown to nearly 440 million in the latest quarter, net income dropped sharply to roughly 33 million due to higher provisions for credit losses (157 million). The company maintains a generous dividend yielding 4.65% and a cash pile of 502 million to weather storms. However, the rising debt-to-equity ratio of 3.86x and increasing loan losses suggest retail investors should be cautious. Overall, the financial picture is mixed: excellent growth potential weighed down by current credit cycle stress.
The company generates exceptional top-line revenue relative to its assets, signaling very strong yields on its loan portfolio.
goeasy generates 440 million in revenue on a loan portfolio of roughly 5.17 billion. This implies an annualized asset yield well above 30%, which is typical for subprime consumer lending but exceptionally high compared to traditional Capital Markets peers. The operating margin of 42.43% further confirms that even after interest expenses (80 million), the spread remains healthy. Compared to the industry average, this yield is Strong (more than 20% above average). This high yield provides a massive cushion against credit losses, allowing them to remain profitable even when defaults rise.
The sharp increase in provisions suggests that underlying delinquencies are likely rising, impacting future earnings visibility.
While specific 'Day Past Due' (DPD) tables are not provided in the snapshot, the financial statements tell the story through the 'Provision for Loan Losses' line item. A jump of over 20 million in provisions in a single quarter (from Q2 to Q3) is a proxy for rising delinquencies or charge-offs. In subprime lending, provisions are mathematically tied to expected losses. The fact that Net Income collapsed to 33 million while Revenue rose suggests that charge-offs or expected charge-offs are accelerating. We treat this as a negative signal regarding the quality of the loan book.
Leverage is high and rising, which increases risk during economic downturns despite a decent cash position.
The debt-to-equity ratio currently sits at 3.86x, up from 3.09x at the end of FY 2024. While non-bank lenders typically run higher leverage, this level is slightly ABOVE the sector average, making it Weak relative to conservative peers who might sit closer to 2.5x-3.0x. Tangible book value is 946 million against total assets of 6.2 billion, providing a thin equity slice (~15%) to absorb losses. While the 502 million in cash offers good immediate liquidity, the rising leverage trend is a concern.
Rapidly rising loan loss provisions are eating into profitability, signaling a deterioration in borrower health.
This is the most critical red flag in the current data. The 'Provision for Loan Losses' jumped to 157.16 million in Q3 2025, up significantly from 136.38 million in Q2 and significantly higher than the run-rate in 2024. This provision now consumes about 35% of total revenue (157M / 440M). Compared to the industry, where provisions often eat 10-20% of revenue, this metric is Weak. The sharp decline in net income (down 61%) is directly caused by this factor, indicating the company is having to build larger reserves for potential defaults.
Specific securitization data is not provided, but the company's ability to raise roughly 1 billion in debt recently suggests capital markets remain confident.
Detailed metrics on ABS trust triggers or excess spread are not available in the provided data. However, we can infer funding health from the Cash Flow Statement. The company successfully issued 987 million in long-term debt in Q3 2025. This indicates that despite rising credit risks, institutional investors are still willing to fund the company's growth. Given the lack of specific trigger data, we view this factor neutrally but mark it as a Pass based on the proven access to liquidity (502 million cash on hand).
goeasy Ltd. has delivered exceptional growth and profitability over the last five years, successfully scaling its consumer lending business. The company nearly quadrupled its loan portfolio from FY2020 to FY24 while maintaining a high Return on Equity (ROE) averaging over 25%. Earnings and dividends have grown consistently, demonstrating that the company can expand aggressively without sacrificing financial stability. Compared to traditional banks, goeasy carries higher risk due to its subprime focus, but its historical returns have far outperformed the sector. Overall, the past performance is highly positive, characterized by disciplined execution and strong shareholder returns.
Operational stability and consistent growth in a regulated sector imply a clean track record, despite a lack of specific granular complaint data.
While specific data on 'complaint rates' or 'exam findings' is not provided in the financial statements, the company's financial stability serves as a strong proxy. In the highly regulated consumer credit space, significant regulatory breaches typically result in fines, halted growth, or soaring legal costs. goeasy has shown uninterrupted growth in receivables (1.15 billion to 4.37 billion) and stable administrative execution over 5 years. There are no massive 'legal settlement' line items visible in the cash flow that would indicate a regulatory failure. The company operates as a standard-bearer in the Canadian non-prime market.
Rising provisions are matched by rising revenues, indicating that loan vintage performance is within priced expectations.
We can infer vintage performance by looking at the 'Provision for Credit Losses' relative to the loan book and earnings. Provisions rose to 467 million in FY24 from 135 million in FY20. While this is a large number, it is a cost of doing business in subprime lending. Crucially, the Net Income line has not collapsed. If vintage outcomes were failing (i.e., defaults were much higher than expected), the provision expense would have wiped out the bottom line. Instead, the company maintained a healthy profit margin and a 25% ROE, proving that the interest rates they charge (pricing) are sufficient to cover the realized losses in their loan vintages.
The company has nearly quadrupled its loan book over 5 years while doubling net income, proving that growth was profitable rather than reckless.
goeasy grew its core asset, 'Loans and Lease Receivables', from 1.15 billion in FY2020 to 4.37 billion in FY24. In the subprime lending industry, rapid growth is often a red flag because it can indicate loose underwriting standards (approving bad borrowers just to show growth). However, goeasy's Net Income kept pace, rising from 136 million to 283 million. This alignment suggests they did not compromise their 'credit box' to achieve scale. Furthermore, the 'Provision for Credit Losses' grew, but clearly remains manageable given the high Return on Equity of 25.11% in FY24. If their growth was undisciplined, losses would have eroded these margins significantly.
The company has maintained an impressive ROE above 16% even during down years, with recent years exceeding 25%.
This is goeasy's strongest factor. Lenders often suffer from wild swings in profitability during credit cycles. goeasy's Return on Equity (ROE) has been remarkably resilient: 35.19% (FY20), 39.72% (FY21), 16.89% (FY22), 25.77% (FY23), and 25.11% (FY24). Even in FY22, which appears to have been a tougher year likely due to macro headwinds or provisioning, they remained highly profitable. A 'worst-case' year of 16.89% ROE is better than the 'best-case' year for many traditional banks, highlighting the structural advantage of their high-yield business model.
The company has successfully accessed capital markets to triple its debt load to fund growth, showing strong confidence from lenders.
As a non-bank lender, goeasy relies on borrowing money to lend it out. Their Total Debt increased from 979 million (FY20) to 3.71 billion (FY24). The fact that they could raise over 2.7 billion in net new debt during a period of volatile interest rates demonstrates robust access to funding. While their cash interest paid quadrupled (50 million to 194 million), this is proportional to the debt increase. The ability to roll over this debt and continue expanding the balance sheet confirms that funding partners view their collateral (the consumer loans) as high quality.
goeasy Ltd. is positioned for robust growth over the next 3–5 years, primarily driven by a massive regulatory shift in Canada that lowers the maximum allowable interest rate to 35%. This change effectively eliminates high-cost payday lenders, consolidating a large portion of the non-prime market directly to goeasy, which already operates efficiently below that cap. While traditional banks continue to tighten credit availability due to economic uncertainty, goeasy is capturing the 'missing middle'—borrowers who are too risky for banks but deserve better rates than predatory lenders. The company is aggressively expanding its loan book, expected to surpass $6B soon, by diversifying into automotive and point-of-sale financing. Despite economic headwinds like potential unemployment rising, goeasy's proprietary credit data allows it to manage risk better than peers. Investor Takeaway: Positive.
The company effectively balances high-touch physical branches with rapid digital adjudication to maximize conversion.
goeasy processes a massive volume of applications, with gross loan originations hitting $3.34B (TTM). Their 'omnichannel' funnel is highly efficient: customers can apply online and get funded in minutes, or visit one of 400+ branches for complex needs. This dual approach maximizes conversion because digital captures the tech-savvy/convenience user, while branches capture those needing hand-holding or those with complicated income situations. The efficiency is proven by their ability to grow originations while maintaining stable acquisition costs, justifying a pass.
goeasy has established a mature, bank-like funding structure that provides a significant cost advantage over competitors.
Growth in the lending business is raw material intensive—you need money to sell money. goeasy has successfully transitioned from high-cost financing to a sophisticated mix of securitization and senior unsecured notes. With operating income of roughly $637M and strong access to capital markets, they have ample funding headroom to support their goal of a loan book exceeding $6B. Their ability to secure funding at rates significantly lower than the yield they generate (roughly 31-34% yield vs 6-8% funding cost) creates a resilient spread that protects them against rate volatility. This funding advantage is a primary reason they will pass while smaller peers fail.
Aggressive expansion into automotive and point-of-sale financing significantly widens the total addressable market.
The company is no longer just a personal loan shop. Through the acquisition of LendCare and the expansion of secured lending products, goeasy has successfully diversified its revenue mix. The shift toward secured lending (auto/home equity) not only opens up larger loan sizes (up to $100k) but also lowers the overall risk profile of the portfolio. This optionality allows them to pivot growth strategies depending on economic conditions—pushing secured loans when risks are high, and unsecured when the economy is strong. This strategic flexibility supports long-term growth.
Merchant relationships in the powersports and retail sectors are creating a sticky, proprietary origination channel.
Through its POS financing arm, goeasy has integrated with thousands of merchants across Canada. These partnerships are critical because they deliver customers to goeasy at the point of purchase, bypassing the need for expensive direct marketing. The pipeline for new merchant partners is robust as retailers desperately need financing options for customers rejected by prime banks. The 'stickiness' of these integrations—where goeasy becomes the default secondary lender in the merchant's software—secures future volume and justifies a pass.
Decades of proprietary data fuel a credit model that outperforms standard scoring methods, acting as a key competitive moat.
goeasy's ability to forecast future growth relies on its ability to predict defaults. They utilize over 30 years of repayment data to build custom risk models that are far superior to generic credit scores for the non-prime demographic. Their continued investment in technology to automate decisioning and improve fraud detection allows them to scale the loan book without linearly scaling headcount or losses. The fact that they can maintain a total yield of ~34% while keeping charge-offs manageable is proof that their risk modeling technology is working effectively.
Based on a comprehensive valuation analysis as of January 15, 2026, goeasy Ltd. (GSY) appears to be undervalued. With a closing price of C$132.46, the stock is trading in the lower third of its 52-week range, suggesting potential for significant upside. The company's valuation is compelling, highlighted by a trailing P/E ratio of approximately 10.0x and a forward P/E of just 7.1x, both of which are below its historical averages and peer medians. Combined with a strong dividend yield of over 4.2%, the stock presents a positive takeaway for investors seeking value, as the market appears to be overly discounting the company's consistent profitability and robust growth prospects.
goeasy's sustainable Return on Equity massively exceeds its cost of equity, justifying a much higher Price-to-Tangible-Book multiple than where it currently trades.
For a lender, a key valuation check is whether its Price-to-Book multiple is justified by its profitability (ROE). goeasy consistently delivers ROE above 20%, while a reasonable cost of equity estimate is 10-12%. With an ROE that is 10-15 percentage points higher than its cost of capital, goeasy creates enormous economic value. This justifies a P/B multiple significantly higher than 1.0x. Its current P/TBV of approximately 2.3x appears reasonable to low given the massive positive spread between its ROE and cost of equity, indicating the market is not fully rewarding the company for its superior profitability.
The high returns generated by goeasy's integrated origination, servicing, and funding platform clearly demonstrate that its market cap does not fully reflect the value of its synergistic business model.
While a formal Sum-of-the-Parts (SOTP) is not applicable to goeasy's integrated model, the value is assessed based on the synergistic operations of its brand, origination channels, underwriting, and servicing platform. The company's high ROE and strong growth are direct results of this successful integration. The current low valuation multiples suggest the market is undervaluing the collective strength of these components. Therefore, the factor passes on the basis that the whole is clearly worth more than the current market value implies.
The recent sharp increase in provisions for credit losses, a proxy for market-implied risk, signals deteriorating borrower health and overrides the positive signal from continued access to debt markets.
Specific data on Asset-Backed Securities (ABS) spreads is not publicly available, but the 'Provision for Loan Losses' serves as a direct proxy for portfolio risk. Financial analysis highlights that provisions spiked to C$157 million in a recent quarter, consuming approximately 35% of revenue. This significant increase serves as a strong indicator that expected lifetime losses on new loans are rising. While goeasy's continued ability to issue new debt shows capital markets remain open, the rising cost of risk embedded in their own financial statements is a clear warning sign from a credit perspective, resulting in a negative implied risk signal.
The stock's valuation is very low relative to its proven, through-the-cycle earnings power, which is demonstrated by a history of elite Return on Equity figures averaging over 25%.
Valuation should reflect through-the-cycle performance rather than just the latest quarter's results. goeasy has a five-year average Return on Equity of 28.5%, an elite figure demonstrating incredible long-term earnings power. The forward P/E ratio of roughly 7x is extremely low for a company with this track record and a consensus future EPS growth rate of 15%. This implies the market is pricing in a severe, permanent decline in profitability, which seems overly pessimistic given the company's history. On a normalized basis, the stock is undervalued.
The company generates exceptionally high yields on its earning assets, providing a massive spread that creates a strong buffer against credit losses and supports a higher valuation.
This factor assesses valuation relative to core business economics. With revenue of C$440 million on a loan portfolio of roughly C$5.17 billion, the implied annualized asset yield is well above 30%. This extremely high yield generates a very wide net interest spread, even after accounting for funding costs and high credit losses. This spread is the fundamental driver of profitability and high ROE. When comparing enterprise value to earning assets, the valuation appears reasonable given the immense profitability of those assets, suggesting the current price does not overvalue the core economic engine.
The most immediate structural risk for goeasy is the regulatory environment in Canada. The federal government has moved to lower the criminal rate of interest to an annual percentage rate (APR) of 35%. While goeasy has been shifting its product mix toward lower-rate loans, this cap creates a permanent ceiling on pricing power. If the government decides to lower this cap further in the future to protect consumers, goeasy's business model would face severe pressure. This regulation forces the company to reject higher-risk applicants they previously would have approved, potentially slowing loan book growth to 10% or 15% instead of historical highs.
Macroeconomic conditions pose a direct threat to the company's credit performance. goeasy serves non-prime borrowers who generally have lower credit scores and less financial resilience than bank customers. In a recession scenario where unemployment rises above 6% or 7%, these customers are the most likely to miss payments. An increase in the net charge-off rate (the percentage of loans unlikely to be paid back) beyond the targeted range of 8.5% to 10.5% would eat directly into profits. Unlike banks, goeasy does not have a large deposit base to fall back on and relies heavily on borrowers making steady payments to maintain cash flow.
Finally, the company faces risks related to its own cost of funding and increasing competition. goeasy carries substantial debt, with gross loan receivables over $4 billion, which it funds by borrowing money via notes and credit facilities. If interest rates remain strictly 'higher for longer' into 2025, goeasy's borrowing costs will stay high, but they cannot raise rates on customers above the 35% cap to compensate. This squeezes the 'net interest margin'—the difference between what they pay to borrow and what they earn from lending. Furthermore, competition from 'Buy Now, Pay Later' services and digital-first fintech lenders could increase customer acquisition costs, forcing goeasy to spend more money just to maintain its market share.
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