Is it too Late to Invest in this TSX Growth Stock?

In recent years, goeasy (TSX:GSY) has emerged as a standout performer in the Canadian stock market, showcasing remarkable growth and resilience amidst economic uncertainties. Despite trading just off its 52-week high, many investors are still eyeing goeasy as one of the best long-term TSX growth stocks available. This article delves into the reasons behind goeasy's continued appeal and why it remains a compelling investment opportunity for the future. 

Navigating Uncertain Terrain 

During the onset of inflation and rising interest rates in late 2022, concerns loomed over goeasy's (TSX: GSY) financial health. As a specialty finance company specializing in higher-interest loans to consumers with below prime credit scores, goeasy was perceived as vulnerable to economic headwinds. However, the company defied expectations by effectively managing its risk exposure, maintaining charge-off rates within target ranges, and sustaining robust growth in its loan book and profitability. 

Resilience in Adversity 

Despite widespread fears of an impending recession and its potential impact on lenders, goeasy demonstrated exceptional resilience. While economic downturns typically result in higher delinquencies on loans, goeasy's proactive risk management strategies shielded it from significant adverse effects. The company's ability to navigate turbulent market conditions underscores its operational excellence and prudent risk management practices. 

Driving Growth Through Risk Management 

Central to goeasy's growth trajectory is its relentless focus on managing risk. While expanding its loan portfolio is essential for revenue growth, the company recognizes that maintaining low charge-off rates is equally crucial. By effectively balancing loan expansion with risk mitigation efforts, goeasy has consistently delivered impressive financial results, driving substantial revenue and earnings growth over the years. 

Impressive Financial Performance 

The numbers speak for themselves when it comes to goeasy's financial performance. Over the past five years, the company has achieved staggering revenue growth of 147%, with a compound annual growth rate (CAGR) of 19.8%. Even more remarkable is its normalized earnings per share (EPS) growth, which soared by 299% over the same period, representing a CAGR of 31.9%. These exceptional financial metrics underscore goeasy's status as a premier growth stock in the Canadian market. 

Prospects for Future Growth 

Despite its recent stock price rally, goeasy continues to offer significant growth potential. As a niche player in the consumer loans industry with a market capitalization of $3 billion, the company remains well-positioned to capitalize on emerging opportunities. Analysts project continued sales growth of over 20% this year and nearly 15% next year, fueled by robust demand for its services. Additionally, as the economy recovers and interest rates normalize, goeasy stands to benefit from increased lending activity and improved credit conditions. 

Attractive Valuation 

While goeasy's stock has experienced a notable uptick in recent months, it remains attractively valued relative to its growth prospects. With a forward price-to-earnings (P/E) ratio of just 10 times, goeasy presents a compelling investment opportunity for value-conscious investors. Moreover, trading below its all-time high, the stock offers potential upside for investors looking to capitalize on its future growth trajectory. 

Goeasy's impressive track record of growth and resilience positions it as a top long-term growth stock in the Canadian market. Despite trading near its 52-week high, the company's continued focus on risk management, robust financial performance, and prospects for future growth make it an enticing investment opportunity. As the economy evolves and interest rates fluctuate, goeasy remains poised to deliver value for shareholders and sustain its status as a premier growth stock.