Propel Holdings: this analyst just raised his target

Roth Capital Partners says Propel Holdings’ (Propel Holdings Stock Quote, Chart, News, Analysts, Financials TSX:PRL) momentum remains strong, helped by record originations, higher portfolio yield and growth in lending-as-a-service revenue.

Analyst Craig Irwin maintained his “Buy” rating on Propel and raised his target to $33.00 from $31.00 in an Aug. 11 update.

Propel reported Q2 revenue of $179.6-million, adjusted EPS of 58 cents and Adjusted EBITDA of $43.6-million. That compared with Irwin’s estimates of $180.0-million, 47 cents and $38.0-million, and consensus of $177.3-million, 47 cents and $38.2-million.

Originations reached a record $243.4-million, above Irwin’s $230-million forecast and up from $199.3-million in Q1 and $194.4-million a year earlier. New customer originations rose 34% year-over-year and represented 46% of total originations.

Irwin said demand remains strong, with daily applications topping 100,000, up from about 40,000 in 2024. He said higher bank rejection rates are pushing more customers toward alternative lenders such as Propel.

Annualized revenue yield rose to 117% from 112% in Q1 and 114% a year earlier, helped by growth in higher-yielding products and the wind-down of legacy programs.

Lending-as-a-service revenue increased to $11.1-million from $5.9-million in Q1 and $4.5-million a year earlier. Management continues to target lending-as-a-service at about 10% of total revenue by Q4.

Propel’s U.K. QuidMarket business also grew, with Q2 revenue of $17.3-million, up from $14.7-million in Q1 and $11.3-million a year earlier.

Irwin said Propel is adding marketing partners and expanding into connected television, online video and AI-optimized digital content.

The analyst raised his 2027 estimates to reflect business momentum, a shift toward higher-yielding programs and the lending-as-a-service ramp. His target is based on six times his 2027 Adjusted EBITDA estimate of US$210-million.

Irwin expects Propel to generate Adjusted EBITDA of $171.0-million on revenue of $750.7-million in fiscal 2026, improving to Adjusted EBITDA of $210.0-million on revenue of $930.0-million in fiscal 2027.

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