Propel Holdings investors can bank on a good year, Ventum says

Propel Holdings (Propel Holdings Inc Stock Quote, Chart, News, Analysts, Financials TSXV:PRL) is set to extend its growth streak into 2025, according to Ventum Capital Markets analyst Rob Goff, who maintained his Buy rating and C$45.00 price target, citing strong earnings momentum, expanding loan volumes and a market-leading return on equity.

He sees momentum continuing, with forecasted 2025 revenue of US$632.9-million and adjusted EBITDA of US$180.5-million, supported by expanding loan volumes, improving provisions, and the outperformance of the recently acquired QuidMarket. Goff also believes the company’s capital-light Lending-as-a-Service (LaaS) business will drive future growth and margin expansion.

Goff estimates those numbers will improve in 2026 with revenue of US$760.9 and EBITDA of US$225.5.

Propel uses AI to offer small loans to underserved borrowers in the U.S., U.K. and Canada, people who traditional banks often turn away. Instead of relying on rigid rules, Propel’s system analyzes over 5,000 data points to assess credit risk more accurately and automatically. Most loans are between $500 and $1,000, with about 70,000 applications each day. Of those, 20% to 25% get offers, leading to roughly 1,000 to 1,500 new contracts daily.

Goff said the U.S. market remains fragmented and ripe for growth, while the U.K. is starting to open up again after a regulatory reset that pushed many lenders out.

He sees strong value in the stock, trading at just 7.9 times expected 2025 earnings, with earnings growth and return on equity far outpacing peers that trade at nearly twice the multiple.

“We note that the consensus Q1/25 revenues following the release of Q4/25 results was US$136.1-million,” he said. “Recent changes have lowered the consensus revenues to US$120.9-million. Our above-consensus revenues reflect 39.6% YoY CLAB on par with the 40.8% YoY growth in Q1/24. Our Q1 Annualized Revenue Yield (ARY), including LaaS, moderates 400 bps QoQ to 109.4%, where we expect a larger proportion of originations to be driven by returning customers and where yields tend to be lower due to the tax return seasonality impact on both demand and repayments.

“Our Q1/25 adj. EPS estimate places our adj. ROE at 37% supporting 40% target adj. ROE for 2025. Our 2025 revenue forecast of US$623.9-million remains slightly above the guidance midpoint at $620.0-million with CLAB growth at 30.1% and adj. ROE at 39.8% relative to guidance at 25-35% and 34%+, respectively.”

Goff said recent data shows U.S. consumers are holding back on non-essential purchases, with spending on discretionary and luxury items rising just 3% year-over-year in March. In contrast, spending on essentials is up 5%, mainly due to higher healthcare costs.

“The employment situation in the U.S. also looks to be holding steady, ticking up to 4.2% in March from 4.0% in December, which is relatively consistent with the monthly trending over the LTM and in line with the U.S. unemployment picture in 2017-2018,” he added. “We note that Propel tends to perform strongly where non-discretionary consumer spend is strong and employment is fairly robust. We recognize macro uncertainty, which could drive a deterioration in consumer spending and/or employment. However, where economic variables see modest revisions, particularly those of moderated growth, we believe the magnitude of Propel’s TAM and dynamic funnel considerations will demonstrate impressive resiliency.”

-30-