A new cryptocurrency offering has Mackie Research Capital analyst Nikhil Thadani raising his price target on Mogo Finance Technology (TSX:MOGO).
On Monday, Mogo announced it will integrate cryptocurrencies into its digital account and plans to develop new products and features based on blockchain technology. The company also noted that it has added blockchain expert Wayne Chen to oversee its efforts in the space.
“It’s hard to overstate how disruptive and transformative blockchain technology can be for banking, as it enables a faster, more secure and trusted way to transfer data,” CEO David Feller said. “In fact, many believe that blockchain will be as disruptive to the financial system as the internet was to the media industry. “Developing new products and features based on blockchain technology and cryptocurrencies is a natural extension for Mogo as we continue to build a digital banking experience for the next generation of consumers.”
Thadani says Mogo has the scope to rollout a crypto offering in a way that few can.
“Mogo plans to reduce transaction costs and make these products accessible to more Canadians,” the analyst explains. “With a product development team of ~100 people and ~500K members, Mogo should be able to offer consumers the ability to own and use cryptocurrencies in a simple, transparent and trusted way. We suspect Mogo would offer an easy to use crypto wallet and a mechanism to buy/sell cryptocurrencies.”
In a research update to clients today, Thadani maintained his “Speculative Buy” rating on Mogo, but raised his one-year price target on the stock from $7.00 to $9.00, implying a return of 89 per cent at the time of publication.
Thadani thinks Mogo will generate EBITDA of $1.23-million on revenue of $47.8-million in fiscal 2017. He expects those numbers will improve to EBITDA of $8.29-million on a topline of $69.4-million the following year.