Mackie Research Capital Corp. Updates Research Coverage of Mogo Finance Technology Inc.

According to data provided by Mackie Research Capital Corporation, 2018 is expected to be a transformative year for Mogo Finance Technology Inc (OTCQX: MOGOF) (TSX: MOGO). The research indicates that Mogo’s Q3/17 financial results, which were published on November 8th, support the company’s evolution towards becoming a financial platform vs. a consumer lender with a mobile app.

The research is raising the price target of Mogo to $12/share from $9/share. Mogo trades at <2x net sales vs. FinTech names at ~ 4x on a 2019 basis. This excludes funding debt from net debt and account for loan book interest revenue net of funding interest expenses. The new $12/share price target reflects ~3.5x net 2019 revenue.

Mogo Finance Technology Inc management has indicated that the company has nine additional products in its roadmap in addition to Mogo Protect (Q4 launch) and Crypto wallet (Q1 launch). In addition, new enhancements to the company’s system, such as rewards with Mogo’s prepaid cards, coupling prepaid card with Mogo’s crypto wallet, Bitcoin backed loans, and potential insurance products have potential to enhance fee based revenues.

The 3rd quarter financials show strong quarter over quarter fee based revenue growth of 30%, at $3.7 million. Mogo ended Q3 with 492K members vs. our 479K estimate. The customer acquisition in Q3 was $33/member. The company is targeting approximately 800K-1 million members by the end of Q4/18 and fee based revenue growing faster than expected.

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