Olympia Financial Group Inc.
Revenue Shortfall Offset by Core Services Growth
Published: Aug 19, 2025
Author: FRC Analysts
*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.
Sector: Financial Services | Industry: Asset Management
Ticker Symbols: OLY.TO – TSX
Report Highlights
- Since our May 2025 report, OLY is up 24%, significantly outperforming the S&P/TSX Composite Financials Index, which rose 10%. We believe the rally was primarily driven by a lower interest rate environment, as historically, lower rates have tended to boost financial stocks.
- After rising 8% QoQ in Q1, client assets declined 1% QoQ to $12.87B in Q2 but remain up 7% YTD. Note that QoQ fluctuations in client assets are not uncommon. As a result, revenue missed our forecast by 2%. EPS fell 8% YoY (Q1: down 6% YoY), missing our forecast by 2%, primarily due to weaker revenue, partially offset by lower-than-expected G&A expenses. Dividends held steady at $1.80/quarter (yield: 5.5%), aligning with our estimate.
- Although we are lowering our 2025 EPS estimate (while maintaining our dividend forecast), we are raising our 2026+ EPS forecasts to reflect lower G&A expenses in both the short and long term.
- A major highlight of the quarter was a 12% YoY increase in total services revenue from core divisions (IAS and Health Service Plans/Q1: up 4% YoY), driven by higher transaction volumes. Services revenue is expected to continue benefiting from organic demand growth in alternative investments, driven by investors seeking greater diversification, and the potential for higher returns amid economic uncertainty, and low interest rates.
- Approximately 50% of revenue came from interest on unallocated client capital held in cash accounts at major Canadian banks/credit unions. Since June 2024, the BoC has cut rates seven times (225 bps) to 2.75%, with two more cuts possible in the next six months amid slowing GDP growth, elevated trade tensions, high unemployment, and cooling inflation. Consequently, we anticipate interest revenue declining in the coming quarters.
- Licensed in all provinces except Ontario, the company’s next catalyst may be federal approval, allowing it to offer services in Ontario as well.
- OLY’s EV/EBITDA is 8.6x (previously 6.7x) vs the sector average of 13.7x (previously 12.4x), a 37% discount.
Primary Services
- Investment Account Services (IAS): OLY is a trustee/custodian/administrator of self-directed registered investment accounts for alternative investments
Fundamental Research Corp. Equity Rating Scale:
Fundamental Research Corp. Equity Rating Scale (ratings are not a recommendation to acquire, dispose of, or take no action regarding a security; the definition of our ratings are explained below):
- Buy – Fair value is 12% above the current market price; or risk and reward is favorable
- Hold – Fair value is between 5% to 12% above the current market price
- Sell – Fair value is 5% above, or less, than the current market value; or risk and reward is unfavorable
- Suspended or Rating N/A – Coverage and ratings suspended until more information can be obtained from the company regarding recent events.
Fundamental Research Corp. – Risk Rating Scale:
- (Low Risk) – The company operates in an industry where it has a strong position (for example a monopoly, high market share etc.) or operates in a regulated industry. The future outlook is stable or positive for the industry. The company generates positive free cash flow and has a history of profitability. The capital structure is conservative with little or no debt.
- (Below Average Risk) – The company operates in an industry where the fundamentals and outlook are positive. The industry and company are relatively less sensitive to systematic risk than companies with a Risk Rating of 3. The company has a history of profitability and has demonstrated its ability to generate positive free cash flows (though current free cash flow may be negative due to capital investment). The company’s capital structure is conservative with little to modest use of debt.
- (Average Risk) – The company operates in an industry that has average sensitivity to systematic risk. The industry may be cyclical. Profits and cash flow are sensitive to economic factors although the company has demonstrated its ability to generate positive earnings and cash flow. Debt use is in line with industry averages, and coverage ratios are sufficient.
- (Speculative) – The company has little or no history of generating earnings or cash flow. Debt use is higher. These companies may be in start-up mode or in a turnaround situation. These companies should be considered speculative.
- (Highly Speculative) – The company has no history of generating earnings or cash flow. They may operate in a new industry with new, and unproven products. Products may be at the development stage, testing, or seeking regulatory approval. These companies may run into liquidity issues and may rely on external funding. These stocks are considered highly speculative.
Definition of FRC’s Fair Value Estimate – Our fair value estimate is the theoretical value of the company’s equity using widely accepted methods of valuation such as discount cash flow or comparables. IT IS NOT A TARGET PRICE or PREDICTION OF THE FUTURE STOCK PRICE.
Disclaimers and Disclosure
Analyst Certification: The views expressed in this report accurately reflect the personal views of the analyst, and no part of their compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed.
Any “forward looking statements” are our best estimates and opinions based upon information that is publicly available and that we believe to be correct, but we have not independently verified with respect to truth or correctness. There is no guarantee that our forecasts will materialize. Actual results will likely vary. The analyst and Fundamental Research Corp.
Fundamental Research Corp. “FRC” owns shares of the subject company: No. The analyst owns shares of the subject company: No , does not make a market or offer shares for sale of the subject company, and does not have any investment banking business with the subject company.
Annual fees ranging from $15,000 to $30,000 have been paid to FRC by Olympia Financial Group Inc. to commission this report and research coverage including update reports. This fee creates a potential conflict of interest which readers should consider. FRC takes steps to mitigate conflicts including setting fees in advance and utilizing analysts who must abide by CFA Institute Code of Ethics and Standards of Professional Conduct. Additionally, analysts may not trade in any security under coverage. Our full editorial control of all research, timing of release of the reports, and release of liability for negative reports are protected contractually. The issuer has agreed to a minimum coverage term and coverage cannot be unilaterally terminated. Distribution procedure: our reports are distributed first to our web-based subscribers on the date shown on this report then made available to delayed access users through various other channels for a limited time.
The distribution of FRC’s ratings are as follows: BUY (71%), HOLD (3%), SELL / SUSPEND (26%). Olympia Financial Group Inc.
This report contains “forward looking” statements. Forward-looking statements regarding the Company and/or stock’s performance inherently involve risks and uncertainties that could cause actual results to differ from such forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company’s products/services in the marketplace; acceptance in the marketplace of the Company’s new product lines/services; competitive factors; new product/service introductions by others; technological changes; dependence on suppliers; systematic market risks and other risks discussed in the Company’s periodic report filings, including interim reports, annual reports, and annual information forms filed with the various securities regulators. By making these forward-looking statements, Fundamental Research Corp. and the analyst/author of this report undertakes no obligation to update these statements for revisions or changes after the date of this report. A report initiating coverage will most often be updated quarterly while a report issuing a rating may have no further or less frequent updates because the subject company is likely to be in earlier stages where nothing material may occur quarter to quarter.
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