On Tuesday, Lake Street Capital Markets adjusted its outlook on MoneyLion Inc. (NYSE: ML), increasing the stock price target to $109 from $75, while retaining a Buy rating on the stock.
The firm highlighted MoneyLion's unique customer acquisition approach and efficient cost structure as key drivers behind the company's improving fundamentals. These factors are anticipated to contribute to MoneyLion's expected GAAP earnings in the second quarter of 2024.
The analyst at Lake Street Capital Markets noted that the market might be underestimating the potential of MoneyLion's enterprise business, citing its product stickiness and streamlined operations.
The company's near-term earnings prospects and the EY opportunity were seen as additional factors that could lead to a reassessment of the stock's value by investors. The EY opportunity is viewed as a "free call option" on shares, with minimal expectations currently factored into the consensus for 2024.
MoneyLion's current trading metrics were also a point of discussion, with the stock trading at 1.5 times its projected 2024 revenue and 10 times its anticipated Adjusted EBITDA. These figures stand in contrast to the median of its peer group, which trades at 3 times revenue and 17 times Adjusted EBITDA.
Lake Street Capital Markets predicts that a reevaluation of MoneyLion's shares will occur as the market begins to recognize the company's effective execution, cost-efficient lead generation model, and the substantial competitive advantage of its enterprise business.
The firm's decision to raise the stock price target is based on applying a higher revenue multiple of 2.0 times and a 12 times EBITDA multiple to the company's 2025 estimates. The analyst expressed increased confidence in MoneyLion's long-term growth trajectory following a more in-depth review of the company's prospects.
InvestingPro Insights
As MoneyLion Inc. (NYSE: ML) garners a positive outlook from Lake Street Capital Markets, real-time data and insights from InvestingPro provide a deeper dive into the company's financial health and market performance.
With a market capitalization of $770.26 million, MoneyLion's revenue growth has been robust, showing a 24.27% increase over the last twelve months as of Q4 2023. Despite not being profitable over the same period, with a negative operating income margin of -1.26%, the company's gross profit margin stands strong at 47.98%.
Investors tracking the stock's performance will note MoneyLion's significant price volatility, as evidenced by a high return over the last year of 443.38%. This aligns with one of the InvestingPro Tips, which highlights the stock's tendency to trade with high price volatility.
Moreover, the company has shown a strong return over the last three months, with a price total return of 48.66%. While MoneyLion does not currently pay a dividend, its liquid assets exceed short-term obligations, suggesting a solid liquidity position.
For those considering an investment, the InvestingPro platform offers additional insights, including a total of 12 InvestingPro Tips that could further inform investment decisions. For a more comprehensive analysis, investors can take advantage of a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro. With the next earnings date set for May 9, 2024, and analyst targets suggesting a fair value of $100, MoneyLion's stock dynamics and potential profitability this year are key factors to watch.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.