Mogo Finance Technology has 236 per cent upside, Mackie Research says

Ahead of Mogo Finance Technology’s (Mogo Stock Quote, Chart TSX, NASDAQ:MOGO) third quarter financials next week, analyst Nikhil Thadani from Mackie Research will be looking for membership growth as well as products and services coming down the pipeline for the Vancouver-based fintech company.

MOGO’s share price suffered a major hit over the back end of 2017 and the first few months of 2018 where the stock lost about half of its value. Since April, MOGO has more or less been trading sideways, although the stock was up in trading on Thursday.

But Thadani points to Mogo’s work over the past year in expanding its product offerings and deemphasizing revenue from its legacy short-term loan products as both areas that he expects to see further progress in its Q3 and beyond.

“We expect Mogo’s member base to reach ~800,000 by the end of the year after recently surpassing 700,000 in late September,” says Thadani in a client update on Thursday. “On the Q2 call, management indicated potential new products could include a high interest savings account in partnership with a bank and a robo-advisor product. While the timeline to launch could be ~9-12 months, additional details could provide a near term catalyst for the stock.”

Thadani is estimating Q3 revenue and Adj. EBITDA for Mogo of $13.9 million and $0.0 million, respectively. The analyst says that Mogo trades roughly 1.6x his 2019 core net sales estimate versus other fintech peers at approximately 4.8x 2019 core net sales.

Thadani maintains his “Speculative Buy” rating and $12.00 target for MOGO, representing a projected return of 236 per cent at the time of publication.