As goeasy (TSX:GSY) continues to expand its financial services, it's raising one question. Is this stock on its way back to 52-week highs? Let's dive into its recent earnings, performance, and outlook to see why some investors might be optimistic about goeasy stock's future trajectory.

Into earnings

To kick things off, goeasy recently posted record-breaking earnings for Q3 2024. Loan originations hit an all-time high of $839 million, a 16% increase from the same period last year. Plus, its loan portfolio grew to $4.4 billion, up a solid 28% from Q3 2023. This growth demonstrates strong demand for goeasy's financial products, suggesting a resilient market for the company's services despite broader economic pressures.

Its revenue growth mirrors these robust lending numbers. Goeasy reported $383 million in revenue for the third quarter, a 19% year-over-year increase. Record earnings per share of $4.88 further underscore its profitability, with adjusted diluted earnings per share (EPS) climbing to $4.32. For investors, these figures indicate that goeasy is successfully capitalizing on its market position, reinforcing confidence that the stock could head back toward previous highs.

Strong base

Beyond earnings, goeasy's operating margins are another encouraging indicator. Its operating margin reached a record 41.7% this quarter, up from 39.3% a year ago, thanks to the company's enhanced credit models and higher proportions of secured loans. With secured loans now making up 45% of its portfolio, goeasy is better insulated from credit risks. This bodes well for stability in earnings and, by extension, share price.

One of goeasy's strong suits is its commitment to maintaining credit performance. The net charge-off rate, which measures loan losses, rose slightly to 9.2%. Yet it remains within goeasy's forecasted range. This stability suggests that goeasy stock has a handle on managing loan defaults, a reassuring sign in the lending business and a factor that could support upward momentum in its stock price.

Still valuable

The company's valuation metrics offer further insight into its potential upside. With a forward price/earnings (P/E) ratio of 8.9, goeasy stock is relatively undervalued compared to its historical averages. Coupled with a trailing P/E of 11.7, this low valuation suggests room for growth, particularly if earnings continue to climb. Additionally, goeasy's 2.6% dividend yield might attract income-focused investors, adding support to its stock price.

The broader market environment could also favour goeasy's growth trajectory. With Canada's unemployment rate steady at 6.5%, consumer demand for alternative credit options remains high. This is beneficial for companies like goeasy that cater to non-prime borrowers. This economic landscape, combined with goeasy's strong financial footing, creates an ideal growth scenario.

Bottom line

So, where might goeasy go from here? If its robust earnings growth continues and credit performance remains stable, this stock may very well approach its 52-week highs again. Strong institutional support, appealing valuation metrics, and a reliable dividend yield provide a foundation that's hard to overlook.

All considered, goeasy's recent performance shows that it's on a promising path. With record loan originations, rising revenues, and a stable lending portfolio, the company looks positioned to reclaim past highs. If you're a growth-focused or income-seeking investor, goeasy could be worth watching as it aims for new milestones.