Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (CAD) | Target 1 (CAD) | Target 2 (CAD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 24 Apr, 25 | PRL | Buy | CAD 25.44 | CAD 27.18 | CAD 29.5 | 5 days | 16.0% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Propel Holdings Inc. operates as a financial technology company. The company's lending platform facilitates to credit products, such as installment loans and lines of credit under the MoneyKey, CreditFresh, and Fora Credit brands to American consumers. It also offers marketing, analytics, and loan servicing services. The company was formerly known as 2288984 Ontario Inc. and changed its name to Propel Holdings Inc. in June 2021. Propel Holdings Inc. was incorporated in 2011 and is headquartered in Toronto, Canada.
Adjusted Net Income Growth: Increased by 75% to $62.3 million in 2024, indicating improved profitability and operational leverage
Revenue Growth: Fiscal 2024 revenue rose by 42% to $449.7 million
Decline in Q4 Return on Equity: Annualized ROE dropped to 27% in Q4 2024 from 35% in Q4 2023, impacted by transaction-related costs
Annualized Revenue Yield Decline: Decreased to 113% in Q4 2024 from 121% in Q4 2023, indicating pressure on unit revenue
Propel’s growth strategy is highly dependent on continued access to low-cost debt capital, regulatory stability, and successful integration of new acquisitions such as QuidMarket.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 25.44 | 22.43 | 27.18 | 29.5 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Record Financial Growth in 2024: Propel achieved exceptional financial performance in both Q4 2024 and fiscal year 2024, setting new records across multiple key metrics. Quarterly revenue increased by 35% year-over-year to $129.3 million, while annual revenue rose by 42% to $449.7 million. Similarly, Adjusted EBITDA grew 48% in Q4 2024 to $31.9 million, and by 60% year-over-year to $121.3 million for the full fiscal year. These figures reflect the company’s robust top-line growth and effective operational execution.
Strong Profitability and Margin Expansion: The company also reported significant gains in profitability. Net income for Q4 2024 increased by 37% year-over-year to $11.6 million, or $12.1 million when excluding $0.7 million in one-time transaction costs related to the acquisition of QuidMarket. Fiscal 2024 net income rose by 67% to $46.4 million, or $48.7 million on an adjusted basis. Adjusted Net Income surged 67% to $16.9 million in Q4 2024 and 75% to $62.3 million for the year. This translated into higher earnings per share, with Adjusted Diluted EPS rising 52% in Q4 to $0.42 and 69% annually to $1.64.
Operational Excellence and Credit Quality: Propel’s operational strength was underscored by its record loan and advance performance. Loans and Advances Receivable rose 45% in Q4 2024 to $375.2 million, while Ending Combined Loan and Advance Balances (CLAB) increased 42% year-over-year to $480.6 million. The Total Originations Funded also reached a quarterly high of $176 million in Q4, contributing to a full-year record of $586 million, up 42% from 2023. Despite growth, the company maintained strong credit performance, with provision for loan losses and liabilities falling to 51% of revenue in Q4 2024—the lowest Q4 level since 2020.
QuidMarket Acquisition and Expansion Initiatives: Propel’s acquisition of QuidMarket in November 2024 provided a new growth avenue in the UK, targeting 20 million underserved consumers. Post-acquisition, QuidMarket contributed positively to revenue and earnings (pre-acquisition-related costs), and integration efforts remain on track. The company also experienced expansion in its Lending-as-a-Service (LaaS) platform and Canadian operations, with Fora achieving record revenue and partnerships such as KOHO becoming operational.
Financial Strength and Capital Allocation: The company ended 2024 with a solid financial position, including approximately $95 million in undrawn credit capacity and a Debt-to-Equity ratio of 1.3x. A C$115 million equity offering in October 2024 further strengthened the balance sheet, supporting the acquisition of QuidMarket. Reflecting confidence in its financial outlook, Propel increased its quarterly dividend by 10% to C$0.165 per share in Q1 2025, following a 7% dividend increase in Q4 2024.
Outlook and 2025 Targets: Propel surpassed its 2024 targets and has set ambitious goals for 2025, targeting revenue between $590 million and $650 million and adjusted net income margins between 13.25% and 16.25%. The company expects further margin expansion driven by operational leverage, loan portfolio scaling, and contributions from QuidMarket. Despite anticipated growth, Propel has acknowledged that targets do not include potential benefits from upcoming new partnerships or products, implying further upside potential if these materialize.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on Propel Holdings Inc (TSX: PRL) at the closing market price of CAD 25.44, as on April 23, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Financial Services Industry: Credit Services
| Company | Change (CAD) | Price (CAD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | |
|---|---|---|---|---|---|---|---|---|
| PRL Propel Holdings Inc |
-0.02 0.06% | 31.58 | 24.68 | 8.31 | 3.28 | 7.70 | 3.20 | |
| GSY goeasy Ltd |
0.64 0.43% | 148.00 | 10.93 | 8.85 | 3.73 | 2.52 | 4.33 | 7.21 |
| ACD Accord Financial Corp. |
0.04 1.27% | 3.20 | - | - | 0.94 | 0.41 | 9.05 | 24.50 |
| CRWN Crown Capital Partners Inc |
- -% | 0.90 | - | 40.98 | 0.11 | 0.27 | 1.63 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is April 23,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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