Mississauga, Ont.-based lender Goeasy Ltd. reported a first-quarter loss that fell short of Bay Street expectations, but some analysts describe the results as far from disastrous and point to signs of stabilization. The company, which specializes in loans to Canadians with low credit scores, posted an adjusted earnings per share loss of $1.90, compared with the analysts' estimate of a $1.43 loss.
Key Metrics and Portfolio Changes
Goeasy's net charge-off rate, which indicates loans unlikely to be collected, rose to 17.8 percent in the first quarter, up from 8.9 percent a year earlier. The consumer loan portfolio reached $5.36 billion, a 12 percent increase from $4.8 billion in the same quarter last year, but a decline of $150 million, or three percent, from the end of the fourth quarter of 2025.
The lender experienced a sharp drop in its share price in March after disclosing unexpected loan losses of approximately $178 million. Despite the disappointing earnings, analysts see some positive trends.
Analyst Perspectives
John Aiken, an analyst at Jefferies Inc., noted in a report that guidance for the second quarter remains tepid, meaning investors will need to wait until the second half of the year for a potential inflection point. Signs of stabilization are evident, but Goeasy must continue navigating the dual challenges of reducing its LendCare portfolio and a weakening economic outlook.
Jaeme Gloyn of National Bank of Canada said the earnings impact tilts negative, as key credit metrics fell short of expectations. Delinquencies in the one-to-90 day bucket increased, signaling ongoing stress in the portfolio. However, he noted that delinquency rates in the 90-to-180 and 181-plus day buckets declined sequentially, and revenues surprised to the upside as commissions proved more resilient than expected.
For analysts to become more bullish, Gloyn emphasized the need for confidence that charge-offs will align with management's guidance, as the first quarter suggested some risk due to weakening core portfolio performance. He expects continued headwinds for the shares.
Share Price and Rights Plan
As of Wednesday afternoon, Goeasy's share price on the Toronto Stock Exchange was $29.44, down five percent for the day. The company also announced that its board has adopted a shareholder rights plan to ensure fair treatment of all shareholders in the event of an unsolicited takeover bid or acquisition of control. The company stated it has not received any offers.
Raymond James analyst Stephen Bolland said the results reflect gradual improvements at the company. While some improvement in credit results is visible, he remains cautious until a longer trend develops.
