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Kaleyra Signs Agreement With Visa For Digital Push; Street Says Buy

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Kaleyra, a mobile communication services provider, and Visa have signed a new agreement to enhance digital payments across the Latin America and Caribbean region.

Per the terms of the contract, k-lab, the innovation lab of Kaleyra (KLR), will act as a communication solutions provider for Visa partners and will resolve all digital communication issues prevalent across the industry. Notably, issues to be resolved include streamlining KYC, reminders of reward benefits, and prior intimation through messages to avoid transaction declines.

Kaleyra CEO Dario Calogero said, “I’ve been really encouraged by the synergies between the solution building approach of k-lab and the deep understanding the Visa (V) team have of the region. These highly customer-centric communication modules will be delivering huge operational savings to Latin American issuers as well as delighting their customers.”

Last month, Kaleyra agreed to buy mGage, a global mobile messaging provider, in a cash-and-stock deal worth $215 million. The acquisition is expected to close in the second quarter of 2021. After completion of the acquisition, the company is expected to generate more than $350 million in revenue for fiscal 2021. (See Kaleyra stock analysis on TipRanks)

On March 19, Northland Securities analyst Michael Latimore reiterated a Buy rating on the stock with a price target of $23 (42.6% upside potential).

“Based on recent industry checks,” Latimore believes “Kaleyra’s (KLR) Q1 is tracking in-line with his expectation of 21% year-over-year growth with sequential drivers for Q2.”

In a note to investors, the analyst said, “Kaleyra signed a large media customer in the Americas at the start of 2020 and the customer will continue to leverage its services this year.”

Kaleyra shares have exploded almost 141% over the past year, while the stock still scores a Strong Buy consensus rating based on 3 unanimous Buys. That’s alongside an average analyst price target of $30, which implies upside potential of about 86% to current levels.

Furthermore, Kaleyra scores an 8 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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