In a research report to clients today, Thadani resumed coverage of Mogo with a “Speculative Buy” rating and one-year price target of $12.00, implying a return of 90 per cent at the time of publication. The firm had halted coverage of the stock as it had participated in Mogo’s recently oversubscribed financing.
Thadani says that despite being one of the top tech performers in Canada last year, the company’s share price still doesn’t reflect its crypto optionality.
“The Cryptocurrency space is very fast moving; for example; last Friday, Ripple’s XRP briefly passed Ethereum as the second highest “market cap” cryptocurrency,” the analyst notes. “Therefore, it is important Mogo’s new Crypto features launch rapidly and scale (major stumbling block with most existing on-ramps) in order for Mogo to gain market share (& potential valuation lift) in this market. We expect positive news on various initiatives in Q1.”
Thadani thinks Mogo will generate EBITDA of $6.93-million on revenue of $70.0-million in fiscal 2018. He expects those numbers will improve to EBITDA of $12.1-million on a topline o $92.9-million the following year.
On December 28, Mogo announced the closing of a $26.25-million financing with a greenshoe option that could push it to $30.18-million.
“Mogo will continue to bring innovation to digital banking in Canada, including new blockchain initiatives such as the upcoming launch of MogoCrypto, a new product that will bring a new level of convenience and trust to buying and selling bitcoin for all Canadians,” said Mogo president and CFO Greg Feller. “We’re looking forward to executing on our robust 2018 road map.”
Disclosure: Mogo is a sponsor of Cantech
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