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There’s a lot to like about the latest developments at Mogo (MOGO). The Canadian fintech player’s just recently reported better than expected 4Q20 results, with revenue of C$10 million, coming in C$3.89 million ahead of the estimates.
However, for H.C. Wainwright analyst Scott Buck, the most exciting aspect regarding Mogo concerns the company’s recent acquisition of wealth management provider Moka Financial Technologies.
The $64 million all-stock transaction in the Canada-based saving and investments app will add roughly 500,000 new members to the Mogo platform and grow Mogo’s member base by over 40% to 1.7 million. The deal is expected to close in the second quarter.
Moka has over C$250 million of assets under management, and Buck makes no bones about how transformative the acquisition could be.
“We believe this purchase accelerates Mogo’s transformation into a full service digital wallet, and starts to put the company on equal footing with many large U.S. fintech peers,” the 5-star analyst said. “We believe this transaction, coupled with the company’s other strategic efforts, puts Mogo on a path towards three million members in the next three to five years. New member growth and a broader product suite are expected to drive top-line growth of between 80% and 100% as the company exits 2021.”
All in all, Buck rates MOGO shares a Buy along with a $16 price target. Investors could be pocketing gains of 78%, should Buck’s thesis play out accordingly. (To watch Buck’s track record, click here)
According to Buck’s colleagues there’s upside, too, albeit on a more modest scale; shares should gain ~31% in the coming months, going by the Street’s $11.74 average price target. Overall, the stock boasts a Strong Buy consensus rating, based on 3 Buys and 1 Hold. (See Mogo stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.