Should you sell your goeasy stock?

Beacon Securities analyst Doug Cooper maintained his “Buy” rating on goeasy (goeasy Stock Quote, Chart, News, Analysts, Financials TSX:GSY) but slashed his target to $80.00 from $275.00 after fourth-quarter and full-year 2025 results, saying the company is still paying for past mistakes but the stock now offers significant upside if the turnaround works.

“The results capped a tumultuous year for the company,” Cooper said, pointing to management turnover, heavy losses in the secured and third-party lending channel and a sharp decline in the share price. Even so, he argued the stock, now trading below book value, is not pricing in any meaningful return to earnings.

Cooper said the main problem sits in the LendCare secured book, where underwriting through the dealer network appears to have been materially weaker than peers as delinquencies in non-prime auto lending rose. He noted consolidated net charge-offs were about 11% in the fourth quarter excluding the cleanup of long-dated overdue receivables, but climbed to roughly 24% including that incremental charge-off. The positive, he said, is that receivables more than 90 days overdue fell to $171-million, or 3.1% of the book, from $310-million, or 5.7%.

For the first quarter, goeasy guided to a charge-off rate of 17.5% to 18.5% on a roughly $5.35-billion loan book, implying another major cleanup quarter. Cooper said that should still lead to declining overdue balances and progressively lower charge-off rates through the rest of the year. Based on a $5.3-billion book, he said every 100 basis points of charge-off is worth about $53-million of profitability, or roughly $2.50 per share after tax.

Despite investor fears, Cooper said he does not see a near-term liquidity crisis. As of Feb. 28, 2026, the company had $240-million in cash and he estimates it generates more than $200-million of quarterly cash flow before loan growth, which he said should allow it to repay its US$64.6-million note due May 1. He added the next key test is renewal of the $612-million securitization facility maturing Oct. 31, 2026, though management has already secured a waiver and said it is confident of renewal.

Cooper said goeasy’s core unsecured installment loan business remains healthy, with a roughly $3.0-billion portfolio and charge-offs near historical levels. He said the company is now leaning back into that business while working through weaker recreational vehicle and non-prime auto exposure.

He expects goeasy to post a roughly $2.00-per-share loss in the first quarter, followed by a small second-quarter loss, a return to profit in the third quarter and more meaningful earnings in the fourth as charge-offs normalize and investor confidence improves.

Cooper said goeasy should generate Adjusted EBITDA of $324.8-million on revenue of $1.61-billion in fiscal 2026, improving to Adjusted EBITDA of $558.8-million on revenue of $1.76-billion in fiscal 2027.

His new $80.00 target is based on 8x his initial 2027 EPS forecast of about $10.00.

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