Is WonderFi still a buy?

Following the company’s third quarter results, Haywood Capital Markets analyst Gianluca Tucci has maintained his “Buy” rating but trimmed his target price on WonderFi Technologies (WonderFi Technologies Stock Quote, Chart, News, Analysts, Financials TSX:WNDR).

On November 5, WNDR reported its Q3, 2024 results. The company posted EBITDA of negative $2.8-million on revenue of $7.2-million

“We’re extremely pleased with the progress we have made in the third quarter,” CEO Dean Skurka said. “Our strong performance throughout the year has allowed us to focus on our strategic priorities and make substantial investments in the areas that will drive long-term material growth. As we look to 2025, we plan to leverage these investments to accelerate our growth path even further,” added Mr. Skurka. “We’re in a strong position to develop and launch a number of new products and features to our global customer base, driving greater volumes in our target markets.”

The analyst summarized the quarter.

The Company and its peers faced trading volumes that continued to remain soft through the quarter, largely on weaker retail transaction revenues. Also, WNDR faced downtime in Q3 associated with the migration of Bitbuy client accounts to Coinsquare, as well as the discontinuation of certain trading activities previously offered to CoinSmart clients. Data from The Block shows that roughly $3.3T was traded on all crypto exchanges in Q3, versus $3.9T QoQ. That said, Q4 is off to a strong start, with WNDR highlighting a 38% increase in revenue in the month of October with a 45% increase in registrations as Bitcoin hits all-time highs in various domestic currencies around the globe, including in CAD, with the US Presidential election serving as key catalyst.

In a research update to clients November 6, Tucci maintained his “Buy” rating on WNDR but trimmed his price target from $0.50 to $0.45, implying a return of 157% at the time of publication.

The analyst thinks WNDR will post Adjusted EBITDA of $10.3-million on revenue of $51.3-million in fiscal 2024. He expects those numbers will improve to Adjusted EBITDA of $19.0-million on a topline of $55.1-million in fiscal 2025.