Its stock has been on an absolute heater since last fall, but Eight Capital analyst Adhir Kadve thinks there is still money to be made on Propel Holdings (Propel Holdings Stock Quote, Chart, News, Analysts, Financials TSX:PRL).
In a research update to clients April 16, the analyst maintained his “Buy” rating but raised his price target on PRL from $25.00 to $29.00.
Kadve says recent time spent with management left him feeling bullish.
“We had the opportunity to go on the road with Propel CEO Clive Kinross and CFO Sheldon Saidakovsky, and we came away incrementally positive about Propel’s overall prospects moving forward,” he wrote. “While shares have performed well recently, the company’s catalyst-rich outlook has us believing that there remains potential upside from here coming from 1) execution on the growth opportunity from its core US lending business, 2) conservatism built into the F24 guidance from FORA credit, 3)a key re-rate opportunity from the ramp and scale of the LaaS program throughout F24 and beyond, and 4) strong capital allocation. As such, in our view, any pullback in price represents a compelling buying opportunity.”
Kadve thinks PRL will post Adjusted EBITDA of $109.2-million on revenue of $422.4-million in fiscal 2024. He expects those numbers will improve to Adjusted EBITDA of $153.2-million on a topline of $514.0-million in fiscal 2025.
“Propel currently trades at 7.2x F25E P/E, vs. a peer group of non-prime lending companies that trade at 7.4x. Our target price is based on 9.5x (was 9.0x). Key risks to our target include: Macroeconomic uncertainty, and risks related to underwriting, capital, personnel and the regulatory environment,” the analyst added.
What does Propel Holdings do? (via Eight Capital)
Propel Holdings Inc. is a Toronto based fintech company that has built a leading online lending platform. The company leverages artificial intelligence and machine learning to facilitate the origination of loans and lines of credit
to underserved non-prime consumers
Comment