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The ongoing market volatility has driven valuations of growth stocks across multiple sectors lower in 2025. As investors and analysts are worried about the tariff war, the time is ripe to identify a portfolio of undervalued TSX stocks trading at a discount to their intrinsic value.
One such TSX stock is Propel Holdings (TSX:PRL), a fintech company valued at a market cap of $948 million. Propel’s online lending platform facilitates access to credit products such as installment loans and lines of credit.
While Propel is part of the lending sector, which is quite cyclical, it has increased sales from $60.2 million in 2018 to $416.4 million in the last 12 months. The company went public in October 2021 and has since returned 184% to shareholders after adjusting for dividend reinvestments. Despite these outsized gains, the tech stock trades 42% below all-time highs. So, let’s see if you should own Propel stock at the current valuation.
Is Propel stock a good buy right now?
Propel Holdings, a leading fintech company focused on providing access to credit for underserved consumers, reported record-breaking third-quarter results and unveiled a significant international expansion with its pending acquisition of U.K.-based QuickMarket.
The company achieved record total originations of $150 million in the third quarter (Q3), representing a 36% increase compared to last year. This strong performance drove record revenue of $117.2 million, up 41% year over year, while net income surged 70% to $10.5 million.
“This has been an extremely busy quarter for Propel and one that has seen us achieve big milestones and record results. It has never been a more exciting time to be at Propel,” said Clive Kinross, founder and chief executive officer, who was recently honoured as Ernst & Young’s Entrepreneur of the Year for Ontario.
A key driver of its success has been an artificial intelligence (AI)-powered underwriting technology, which has enabled Propel and its bank partners to extend credit to more consumers while maintaining strong credit performance. For instance, net charge-offs as a percentage of CLAB decreased to 11% in Q3 of 2024 from 12% in the year-ago period.
Building on its strong North American foundation, Propel announced the pending acquisition of QuickMarket, a leading U.K. fintech lender, for $71 million. The all-cash transaction is expected to be immediately accretive to adjusted earnings per share and represents Propel’s first step toward becoming a global player in the fintech lending space.
“We’ve always had global ambitions for Propel, and to see us enter the U.K. and become a truly global company is exceptionally exciting,” Kinross noted.
Is the TSX stock undervalued?
During its earnings call, Propel highlighted new growth initiatives, including an embedded lending partnership with Canadian fintech Koho and ongoing expansion of its lending-as-a-service program in the United States.
The growth story for Propel is far from over, as analysts expect its sales to rise to $628 million in 2025. Comparatively, adjusted earnings per share are forecast to expand from $0.98 in 2023 to $2.32 in 2025. So, priced at 10 times forward earnings, PRL is a growth stock that trades at a cheap multiple.
A widening earnings base should also support consistent dividend hikes. Today, Propel pays shareholders an annual dividend of $0.60 per share, translating to a forward yield of 3.5%. These payouts have risen from $0.38 per share in 2022.
Given consensus price target estimates, analysts remain bullish and expect the TSX stock to rise around 90% from current levels.