Beaten down Propel Holdings is a buy, Ventum says

The stock has taken it on the chin, but Ventum Capital Markets analyst Rob Goff says this is an opportunity for investors to make money on fintech player Propel Holdings (Propel Holdings Stock Quote, Chart, News, Analysts, Financials TSX:PRL).

In a research update to clients March 3, Goff reiterated his “Buy” rating and 12-month price target of $45.00 on PRL, implying a return of 56.7% at the time of publication.

The analyst says the market headwinds the company has faced of late spell opportunity for investors.

“We see the 25% decline over the past month as a compelling opportunity. We look for solid Q4/24 results (March 12), positive but conservative guidance (aka 50% EBITDA growth), and an encouraging narrative around loan provisions, QuidMarket, access to more and lower cost of capital, and building LaaS momentum,” he wrote.

Goff thinks PRL will post Adjusted EBITDA of $120.3-million on revenue of $449.4-million in fiscal 2024. He expects those numbers will improve to Adjusted EBITDA of $186.6-million on a topline of $634.4-million in fiscal 2025.

The analyst shared his investment thesis on Propel.

“Propel’s financial performance stands out among its fintech peers as it leverages its end-to-end, AI-powered technology platform to effectively serve North American consumers seeking non-prime credit solutions,” Goff argued. “This market segment is largely neglected by traditional banks due to their reliance on conventional credit scores, labour-intensive procedures, and risk-averse cultures. Propel’s strategic approach is further bolstered by its recent acquisition of QuidMarket, which opens a UK gateway and exemplifies management’s exceptional stewardship. Led by CEO Clive Kinross, the leadership team brings a rich history of both organic growth and successful acquisitions, as evidenced by Kinross’s previous success with OPENLANE, Inc.”