ECN Capital (ECN) AI Stock Analysis

• Market Cap: C$790.01M
• Dividend Yield: 1.4%
• Average Volume (3M): 120.30K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.12
• Revenue Growth: 54.95%
• EPS Growth: N/A
• Country: CA
• Employees: 690
• Sector: Financial
• Sector Strength: 89
• Industry: Financial - Credit Services
• EPS (TTM): 0.04
• Shares Outstanding: 281,142,640
• 10 Day Avg. Volume: 55,610
• 30 Day Avg. Volume: 120,302
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 2.40
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 21.52
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$3.50
• Price Target Upside: 22.81% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

ECN Capital is showing a promising recovery with improved financial performance and positive technical indicators. The earnings call supports a strong growth outlook. However, high leverage and valuation challenges present risks. Continued focus on debt management and operational efficiency is crucial for sustaining positive momentum.

Positive Factors

Future Growth Expectations

ECN maintains its 2025 guidance for significant growth in originations and operating income.

Growth in Originations

ECN's Marine and RV segment showed significant year-over-year growth in originations, aided by sales network expansion.

Negative Factors

Financial Performance Challenges

Q4/24 adjusted EPS missed consensus and guidance expectations, indicating financial performance challenges.

Leadership and Strategy Uncertainty

There are uncertainties in guidance and execution due to leadership and strategy changes at Triad, which may impact future performance.

ECN Capital Business Overview & Revenue Model

Company Description

ECN Capital (ECN) is a leading provider of business services to North American-based banks, credit unions, life insurance companies, pension funds, and investment funds. The company primarily operates in the financial services sector, focusing on originating, managing, and advising on credit assets. ECN Capital offers a range of solutions, including equipment finance, commercial finance, and home improvement finance, supporting its clients in optimizing their asset portfolios and enhancing their customer service capabilities.

How the Company Makes Money

ECN Capital makes money through a variety of revenue streams centered around its expertise in financial services. The company's primary sources of revenue include interest income from its lending activities, fees for managing and advising on credit assets, and gains from the sale and securitization of financial assets. ECN Capital also generates income from servicing agreements and partnerships with financial institutions, where they leverage their expertise to manage portfolios on behalf of their clients. Additionally, the company benefits from strategic partnerships with banks and other financial entities, which help expand its service offerings and reach within the financial sector.

ECN Capital Financial Statement Overview

Summary

ECN Capital demonstrates signs of recovery with improved revenue and profitability in 2024. The income statement shows inconsistencies and operational challenges, and the balance sheet reveals high leverage. The cash flow indicates recovery, but historical volatility raises concerns about sustainability.

Income Statement

ECN Capital has shown significant volatility in its income statement over the years. While there was an improvement in revenue to $220.76M in 2024, the firm struggled with negative gross profit in 2023 and fluctuating EBIT and EBITDA margins. The recent improvement in net income from a substantial loss in 2023 to a profit in 2024 is a positive indicator, but historical inconsistencies suggest caution. The gross profit margin for 2024 is 39.93%, showing recovery, yet EBIT margin was negative in previous periods, indicating operational challenges.

Balance Sheet

The company's balance sheet reflects a high level of debt with a debt-to-equity ratio of 2.85 in 2024, indicating significant leverage. This presents both risk and potential for financial strain. However, the equity ratio has slightly improved, suggesting some stability with an equity of $207.48M against total assets. The ongoing decrease in stockholders' equity over the years is a concern, but total liabilities have been managed relative to assets.

Cash Flow

ECN Capital's cash flow statement indicates strong recovery in 2024 with operating cash flow rebounding to $180.86M from negative figures in recent years. Free cash flow has also turned positive, reflecting improved financial health. The operating cash flow to net income ratio suggests robust cash generation relative to profits, but historical volatility in free cash flow raises concerns about sustainability.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
220.76M	79.48M	196.67M	215.37M	266.72M
	Gross Profit
88.15M	-62.72M	90.81M	120.77M	167.44M
	EBIT
0.00	-45.07M	31.08M	19.38M	75.28M
	EBITDA
32.19M	-40.84M	44.03M	-9.94M	22.68M
	Net Income Common Stockholders
7.63M	-106.78M	6.72M	4.97M	15.82M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
15.46M	23.24M	12.71M	45.04M	37.98M
	Total Assets
937.15M	1.28B	1.42B	1.15B	1.71B
	Total Debt
590.94M	917.70M	1.01B	274.60M	531.79M
	Net Debt
575.48M	894.46M	995.28M	229.56M	493.81M
	Total Liabilities
726.25M	1.08B	1.22B	927.49M	883.64M
	Stockholders Equity
207.48M	209.49M	193.68M	218.63M	822.56M
Cash Flow		Free Cash Flow
179.73M	-45.44M	-912.20M	131.76M	-80.27M
	Operating Cash Flow
180.86M	-26.03M	-869.27M	139.73M	-77.61M
	Investing Cash Flow
147.75M	43.38M	116.25M	-79.83M	-3.19M
	Financing Cash Flow
-334.89M	-6.79M	721.07M	-1.83B	35.14M

ECN Capital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.85
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ECN, the sentiment is Positive. The current price of 2.85 is above the 20-day moving average (MA) of 2.77, above the 50-day MA of 2.75, and above the 200-day MA of 2.65, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 69.80 is Neutral, neither overbought nor oversold. The STOCH value of 79.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ECN.

ECN Capital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GSY	75 Outperform	$2.55B	9.66	23.56%	3.36%	18.04%	2.48%
MKP	75 Outperform	C$735.62M	9.18	11.99%	8.27%	26.81%	-6.49%
GCG	74 Outperform	C$1.01B	9.56	5.62%	3.52%	35.78%	-24.67%
CF	67 Neutral	$869.45M	164.20	-2.30%	4.06%	14.45%	-22.63%
ECN	65 Neutral	C$790.01M	―	6.65%	1.40%	54.95%	―
Sector *	64 Neutral	$12.57B	9.74	7.88%	16985.68%	12.42%	-5.45%
DLCG	63 Neutral	C$634.09M	37.65	-151.96%	1.49%	35.48%	-4412.25%

ECN Capital Corporate Events

ECN Capital Corp. Achieves Strong Q1 2025 Financial Results

ECN Capital Corp. reported a strong financial performance for the first quarter of 2025, with adjusted net income reaching $0.03 per share, hitting the top end of its guidance. The company demonstrated resilience amid market volatility, with significant originations in its key segments and an increase in managed assets to $7.2 billion. The Board of Directors declared dividends for common and preferred shareholders, reflecting confidence in the company’s financial health. These results underscore ECN Capital’s robust operational capabilities and its strategic positioning in the financial services sector.

Spark’s Take on TSE:ECN Stock

According to Spark, TipRanks’ AI Analyst, TSE:ECN is a Neutral.

ECN Capital’s overall score reflects a company in recovery mode with noticeable improvements in financial performance and optimistic earnings guidance. However, the high leverage, valuation challenges, and technical indicators showing lack of momentum temper the positive outlook. Strategic corporate events and strong earnings call insights contribute positively to the score.

To see Spark’s full report on TSE:ECN stock, click here.

ECN Capital to Release Q1 2025 Financial Results and Host Analyst Briefing

ECN Capital Corp. has announced its intention to file its financial statements and management discussion for Q1 2025 on May 8, 2025, after market close. The company will hold an analyst briefing to discuss these results on the same day. This announcement is significant as it provides stakeholders with insights into the company’s financial performance and strategic direction, potentially impacting its market positioning and investor relations.

Spark’s Take on TSE:ECN Stock

According to Spark, TipRanks’ AI Analyst, TSE:ECN is a Neutral.

ECN Capital’s overall score reflects a company in recovery mode with noticeable improvements in financial performance and optimistic earnings guidance. However, the high leverage, valuation challenges, and technical indicators showing lack of momentum temper the positive outlook. Strategic corporate events and strong earnings call insights contribute positively to the score.

To see Spark’s full report on TSE:ECN stock, click here.

ECN Capital Closes Additional C$8 Million Debenture Offering

ECN Capital Corp. announced the closing of an additional C$8 million offering of 6.50% convertible senior unsecured debentures, following the exercise of an over-allotment option by a syndicate of underwriters. This brings the total gross proceeds from the offering to C$83 million, which will support the company’s operations and potentially enhance its market position by providing high-quality assets to its partners.

ECN Capital Closes C$75 Million Debenture Offering

ECN Capital Corp. has successfully closed a C$75 million offering of 6.50% convertible senior unsecured debentures due in 2030. The proceeds from this offering will be used to redeem the company’s outstanding 6.00% senior unsecured debentures due December 2025. This strategic move is expected to streamline ECN Capital’s financial obligations and potentially enhance its market position by reducing debt costs. The new debentures will trade on the Toronto Stock Exchange, and the redemption of the older debentures will lead to their delisting.

ECN Capital Announces C$75 Million Convertible Debenture Offering

ECN Capital Corp. has announced a C$75 million bought deal offering of 6.50% listed convertible senior unsecured debentures, set to mature on April 30, 2030. The proceeds from this offering are intended to redeem existing senior unsecured debentures due December 31, 2025, subject to lender approval, and may also be used to manage existing indebtedness. This move is part of ECN Capital’s strategic financial management to optimize its debt structure, potentially impacting its market positioning and stakeholder interests.

ECN Capital Reports Strong Q4 2024 Results, Declares Dividends

ECN Capital reported a solid performance for Q4 2024, with an adjusted net income of $0.02 per share, reflecting a significant improvement from the previous year’s loss. Despite challenges such as severe weather disruptions, the company completed its turnaround, enhancing operations and profitability. The Manufactured Housing segment remains a key focus, contributing significantly to originations, while the RV and Marine segments continue to gain market share. The company declared dividends for both common and preferred shareholders, indicating a stable financial position.

ECN Capital to Release Q4 2024 Financial Results

ECN Capital Corp. has announced it will release its financial results for Q4 and the full year ending December 31, 2024, on February 27, 2025. An analyst briefing will be held the same day to discuss these results. This announcement provides insights into the company’s financial performance and may impact its market positioning by influencing stakeholder confidence and investment decisions.