Disclosure: Olympia Financial Group Inc. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
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Price and Volume (1-year)
Primary Services
The leading Canadian custodian/ administrator of alternative investments
OLY’s platform caters to a comprehensive range of investments not supported by banks, and other traditional trading/investment platforms
In Q2-2025, 79% of revenue came from IAS (Q1: 77%), 10% from health service plans (unchanged), and the remaining 13% from other services, largely consistent with the prior year
After rising 8% QoQ in Q1, client assets declined 1% QoQ to $12.87B in Q2. We are lowering our year-end estimate by 2% to $13.55B
Q2 revenue was down 3% YoY (Q1: down 0.3% YoY) amid lower interest on unallocated client capital, missing our forecast by 2%, as we had anticipated higher client assets
Importantly, total services revenue from core divisions (IAS and Health Service Plans) was up 12% YoY (Q1: 4%), driven by higher transaction volumes
G&A expenses rose 1% YoY, but came in 1% below our forecast. EPS declined 8% YoY (Q1: down 6%), missing our forecast by 1% due to weaker revenue, partially offset by lower-than-expected G&A expenses
Dividends held steady at $1.80/quarter, aligning with our estimate. The payout ratio was 80% vs the historic average of 70%
FRC Projections and Valuation
We are not making any material changes to our long-term revenue forecast, supported by our positive outlook on alternative investments, and OLY’s position as the leading administrator of registered plans for alternative investments in Canada.
Since client assets under administration were lower than anticipated, we are lowering our 2025 revenue and EPS estimates
However, we are raising our 2026+ EPS forecasts, reflecting lower G&A expenses both in the short and long term
We are reiterating our BUY rating, and adjusting our fair value estimate from $147.91 to $177.66/share (the average of our DCF and comparables valuations), implying a potential return of 41% (including dividends) in the next 12 months. OLY has delivered strong stock performance, up 24% since May 2025, supported by a favorable low-interest-rate environment. While Q2 revenue and EPS missed expectations, core services revenue grew, and long-term EPS forecasts are rising due to anticipated G&A efficiencies. Looking ahead, the approval as a federal trust corporation and continued demand for alternative investments present key catalysts, while the stock remains attractively valued relative to peers at a 37% EV/EBITDA discount.
Sector multiples are up 10% since our previous report in May 2025
Anticipating the company’s likely approval as a federal trust corporation, we have removed the 20% discount previously applied to sector multiples in valuing OLY
As a result of the above factors, our comparables valuation increased from $151 to $202/share
Risks
We believe the company is exposed to the following key risks (not exhaustive):
APPENDIX
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