PAPL Stock Forecast & Price Target

Pineapple Financial Inc. is poised for growth, bolstered by recent Bank of Canada rate cuts totaling a 200 basis point decline since last summer, alongside a renewed emphasis on affordable housing, which is expected to contribute to incremental revenue growth. The company anticipates a significant wave of mortgage renewals, with over 1 million mortgages up for renewal in Canada this year, representing 17% of all outstanding mortgages, which should further drive expansion in the coming 24 months. Additionally, the firm reported a 23% year-over-year growth in mortgage volume processed, reaching $386 million in F2Q24, which generated billing revenue of $4.2 million, indicating a solid foundation for continued growth through FY25 and FY26.

Pineapple Financial Inc. faces a challenging financial outlook due to expectations of continued operating losses throughout the remainder of the year, despite some anticipated moderate operating leverage. Additionally, the company's other revenue inputs, primarily from underwriting and subscriptions, experienced a significant decline of 27% year-over-year, falling to $322k from $442k in the previous quarter, contributing to a 5% decrease in overall revenues compared to forecasts. Finally, the firm's cash position showed a modest decline, ending the quarter at $493k, a decrease from $580k at the beginning of the fiscal year, which raises concerns about its liquidity and financial stability moving forward.