WonderFi earns price target raise at Eight Capital

Following the report of record November numbers, Eight Capital analyst Kiran Sritharan has raised his price target on WonderFi Technologies (WonderFi Technologies Stock Quote, Chart, News, Analysts, Financials TSX:WNDR).

On December 3, WNDR reported that it had achieved $8.5-million in revenue, up 141% from October.

“The records we’ve set in the past month underscore our ability to offer reliable, safe and secure trading in the world’s premier cryptocurrencies while delivering an exceptional customer experience,” CEO Dean Skurka said. “We’re also pleased the strong momentum in our business is carrying into December, supported by a broader bull market for digital assets and a promotional holiday campaign aimed at rewarding loyal customers and driving higher engagement. We remain focused on continuous improvement and innovation as we build Bitbuy and Coinsquare into world-class cryptocurrency destinations for retail and institutional investors alike.”

The analyst says things are looking up for the company.

“Yesterday, WonderFi pre-released its November revenue highlighting record performance QTD and landing significantly ahead of previous Street estimates,” he noted. “The broader industry and WonderFi are benefitting from the ongoing bull market for digital assets as investors capitalize on rising asset prices (BTC is +35% m/m) leading to a surge in trading activity (Figure 1). This was supported by recent initiatives by WonderFi to drive user growth and engagement, alongside the nowcomplete Bitbuy platform migration. We like the F25 setup for WonderFi, particularly as the Republican-win is likely to lead to a more lenient approach toward crypto regulation and provide further catalysts to drive similar strength.”

In a research update to clients December 4, Sritharan maintained his “Buy” rating and raised his price target on WNDR from $0.45 to $0.70.

The analyst thinks the company will post Adjusted EBITDA of $11.6-million on revenue of $54.5-million in fiscal 2024. He expects those numbers will improve to Adjusted EBITDA of $13.3-million on a topline of $66.1-million in fiscal 2025.

“We are maintaining our BUY rating and increasing our target price to C$0.70 (from C$0.45) based on 6.5x F25E Sales (from 4.0x),” he added. “WonderFi currently trades at 2.1x F25E EV/Sales vs. industry bellwether Coinbase Global Inc. (COINN, Not Rated) at 12.5x, and consumer fintech companies at 4.9x. Risks to our target include market volatility, regulatory, and tightening competitive dynamics.”