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Propel Holdings Inc (TSE:PRL)
TSX:PRL
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Propel Holdings Inc
(TSX:PRL)
72Outperform
Positive Factors
Acquisition and Expansion
Propel's acquisition of QuidMarket is seen favorably as it allows expansion into a significantly underserved market in the UK through a well-known local operator.
Dividend Increase
Propel increased its annual dividend by 10% to C$0.66, marking the seventh time the company has announced a dividend increase.
Financial Performance
Propel reported Q4 results featuring a beat on credit and EPS, with revenue growing by 35% year-over-year to reach $129.3M.
Negative Factors
Market Disconnect
Despite the beat and solid guidance, shares were down over 10% on the day, indicating a disconnect in the market.
Market Reaction
Despite strong Q4 results and solid guidance, shares were down over 10%, indicating a market disconnect possibly due to management’s wide guidance range or concerns around US unsecured consumer credit.
Uncertain Guidance
Management targets a conservative 40% revenue growth for QuidMarket in the next year but expects growth to accelerate meaningfully beyond that with Propel’s capital support.
Propel Holdings Inc (PRL) vs. S&P 500 (SPY)
Market Cap
C$906.84M
Dividend Yield2.44%
Average Volume (3M)265.60K
Price to Earnings (P/E)13.2
Beta (1Y)0.83
Revenue Growth44.34%
EPS Growth65.62%
CountryCA
Employees462
SectorFinancial
Sector Strength84
IndustryCredit Finance
Share Statistics
EPS (TTM)1.81
Shares Outstanding38,853,680
10 Day Avg. Volume284,765
30 Day Avg. Volume265,600
Financial Highlights & Ratios
PEG Ratio0.20
Price to Book (P/B)N/A
Price to Sales (P/S)2.91
Price to Cash Flow (P/CF)-6.50
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$43.40Price Target Upside85.95% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Propel Holdings Inc Business Overview & Revenue Model
Company DescriptionPropel Holdings Inc. operates as an online financial technology company. The company's online lending platform facilitates access to credit products, such as installment loans and lines of credit under the MoneyKey and CreditFresh brands to American consumers. It also offers marketing, analytics, and loan servicing services. Propel Holdings Inc. was incorporated in 2011 and is headquartered in Toronto, Canada.
How the Company Makes MoneyPropel Holdings Inc generates revenue primarily through the interest and fees associated with its consumer lending products. The company offers a variety of credit solutions, including installment loans and lines of credit, which provide flexible repayment options for borrowers. Propel Holdings earns money by charging interest on the outstanding balances of these loans and by levying various service fees. Additionally, the company may partner with other financial institutions or technology providers to enhance its service offerings and expand its customer reach, contributing to its revenue streams. Propel's focus on leveraging technology to assess creditworthiness and manage risk efficiently is a significant factor in its earnings model.
Propel Holdings Inc Financial Statement Overview
Summary
Propel Holdings Inc shows robust revenue growth and profitability improvements over recent years, with a significant increase in net profit margin. However, challenges with operational cash flow generation and high debt levels pose risks that need careful management.Income Statement
Propel Holdings Inc has shown impressive revenue growth over the years, with a significant increase from $64.58M in 2019 to $416.02M in 2024. The gross profit margin is consistently high at 100%, indicating strong pricing power and cost management. However, the company reported no EBIT or EBITDA for 2024, which could indicate increasing operational costs or strategic reinvestments impacting profits. The net profit margin improved to 11.14% in 2024 from 3.09% in 2019, reflecting enhanced efficiency in converting revenues into net income.85
Very Positive
Balance Sheet
The debt-to-equity ratio has remained relatively stable, reflecting prudent financial management though it is on the higher side, posing potential risks if not managed carefully. The equity ratio improved to 38.13% in 2024 from a low of 4.46% in 2019, indicating stronger financial stability. Return on equity (ROE) stands at 22.07% in 2024, showcasing effective use of equity to generate profits. However, the high level of debt suggests risk if earnings do not sustain growth.78
Positive
Cash Flow
The company's free cash flow has been consistently negative, raising concerns about its ability to generate cash independently from operations. The operating cash flow to net income ratio is negative, indicating that net income does not translate effectively into cash flow. Despite this, Propel Holdings has managed to secure financing to support its cash needs, evidenced by strong financing cash flows.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 416.02M | 316.49M | 216.57M | 123.13M | 69.07M | Gross Profit |
| 416.02M | 316.49M | 216.57M | 123.13M | 69.07M | EBIT |
| 0.00 | 64.81M | 30.39M | 8.06M | 10.42M | EBITDA |
| 0.00 | 0.00 | 30.66M | 0.00 | 11.07M | Net Income Common Stockholders |
| 46.38M | 27.78M | 15.13M | 6.56M | 7.33M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 20.50M | 13.75M | 7.66M | 7.24M | 5.25M | Total Assets |
| 551.01M | 344.26M | 256.68M | 149.50M | 79.05M | Total Debt |
| 274.29M | 201.52M | 151.57M | 50.05M | 52.83M | Net Debt |
| 253.79M | 187.77M | 143.91M | 42.81M | 47.59M | Total Liabilities |
| 340.89M | 242.74M | 175.04M | 74.17M | 70.64M | Stockholders Equity |
| 210.11M | 101.52M | 81.64M | 75.33M | 8.42M |
| Cash Flow | Free Cash Flow | |||
| -61.13M | -32.39M | -90.59M | -54.60M | -17.55M | Operating Cash Flow |
| -54.84M | -26.95M | -85.32M | -51.83M | -15.42M | Investing Cash Flow |
| -71.90M | -5.43M | -5.27M | -2.76M | -2.13M | Financing Cash Flow |
| 134.83M | 38.48M | 91.01M | 56.59M | 16.59M |
Propel Holdings Inc Technical Analysis
Negative
23.34
Price Trends
31.81
Negative
34.25
Negative
30.65
Negative
Market Momentum
-2.32
Negative
34.14
Neutral
50.03
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PRL, the sentiment is Negative. The current price of 23.34 is below the 20-day moving average (MA) of 25.10, below the 50-day MA of 31.81, and below the 200-day MA of 30.65, indicating a bearish trend. The MACD of -2.32 indicates Negative momentum. The RSI at 34.14 is Neutral, neither overbought nor oversold. The STOCH value of 50.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:PRL.
Propel Holdings Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | C$440.08M | 12.02 | 8.33% | 7.81% | -0.70% | 1.11% | |
72 Outperform | C$906.84M | 13.23 | 29.13% | 2.44% | 44.34% | 65.62% | |
65 Neutral | C$256.52M | 30.87 | 3.67% | 2.08% | 15.70% | -44.25% | |
64 Neutral | $14.59B | 10.31 | 8.70% | 4.21% | 16.52% | -11.97% |
* Financial Sector Average
Performance Comparison
TSE:PRL
Propel Holdings Inc
23.34
7.16
44.25%
TSE:FC
Firm Cap Mortgage Invest
12.02
1.44
13.61%
TSE:VCM
Vecima Networks
10.55
-9.08
-46.26%
EHMEF
goeasy
106.04
-9.52
-8.24%
EQGPF
Equitable Group
68.48
6.96
11.31%
DVSPF
Dividend 15 Split Corp
3.97
0.56
16.42%
Propel Holdings Inc Earnings Call Summary
Earnings Call Date: Mar 12, 2025 | % Change Since: -8.86% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
Propel Holdings delivered strong Q3 2024 results with record-breaking revenue and growth metrics, a strategic acquisition, and increased dividends, despite facing one-time expenses and challenges in the Canadian market.Highlights
Record-Breaking Q3 2024 Results
Propel's Q3 2024 results included record total originations funded of $150 million, up 36% year-over-year, and record revenue of $117.2 million, up 41% from Q3 2023.
Strong Financial Performance
Net income rose to $10.5 million, a 70% increase from the previous year, while adjusted net income was $14.1 million, up 66%. The net income margin increased to 9% from 7% last year.
Acquisition of QuidMarket
Propel announced the acquisition of QuidMarket, a UK fintech lender, for $71 million. The acquisition is expected to be immediately accretive to 2024 and 2025 adjusted EPS.
Dividend Increase
Propel's Board approved an increase in the dividend from CAD 0.56 to CAD 0.60 per share annually, marking the sixth dividend increase since early 2023.
Lending-as-a-Service Growth
The Lending-as-a-Service program has expanded, with new purchasers set to join, positioning the company for strong growth in 2025.
Awards and Recognition
Propel was recognized on the Globe and Mail's Top Growing Companies list and Clive Kinross won the EY Entrepreneur of the Year award for Ontario.
Lowlights
One-Time Expenses Impact
Net income was adversely impacted by one-time expenses of $2.5 million related to the QuidMarket acquisition transaction.
Canadian Market Challenges
Canada's unemployment rate is higher than the U.S. at 6.5%, with muted retail sales, impacting consumer spending.
Interest Rate Environment
Interest rates have been aggressive in Canada, with the Bank of Canada cutting rates four times in 2024 to 3.75%.
Company Guidance
During Propel Holdings' Q3 2024 earnings call, the company highlighted several key metrics and strategic initiatives. Total originations funded reached a record $150 million, marking a 36% increase compared to Q3 2023, while revenue climbed to $117.2 million, up 41% year-over-year. Net income rose to $10.5 million, a 70% increase from the previous year, and adjusted net income increased by 66% to $14.1 million. The net charge-offs as a percentage of CLAB improved to 11% from 12% in Q3 2023, reflecting strong credit performance. Propel also announced a 7% increase in its dividend to CAD 0.60 per share annually. Additionally, the company discussed the strategic acquisition of QuidMarket, a U.K. fintech lender, expected to be accretive to 2024 and 2025 adjusted EPS. Propel's ongoing growth initiatives include a new partnership with KOHO in Canada and expansion of its Lending-as-a-Service program, positioning the company for continued success into 2025.Propel Holdings Inc Corporate Events
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Propel Holdings Inc. Achieves Record Financial Results in 2024
Positive
Mar 12, 2025
Propel Holdings Inc. reported record financial results for Q4 and fiscal year 2024, with significant increases in revenue, adjusted EBITDA, and net income. The company’s strong performance reflects its successful acquisition of QuidMarket and its strategic focus on expanding credit access, positioning it favorably within the fintech industry.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.