8 Capital: Mogo Inc.- A new path ahead with Carta-target $10Rob0012 - for the moment the market is tying MOGO too strongly to a Bitcoin play. So as Bitcoin value goes up so does MOGO. And vice verca.
But the reality is that MOGO is much much more than a Bitcoin company. That is just one of the components. Once the market fully realized this - the share price should really move up.
It is a volatile stock though...as we can see.
Eight Capital just increased their target price to $10 per share.
| Mogo announced the closing of their acquisition of payments player Carta yesterday, marking a major milestone in their transformation to a payments and digital wallet company, positioning them for a potential $500bn TAM opportunity in Canada alone (see Figure 2 on Page 3). With its roadmap to a peer-to-peer (P2P) payments offering solidified (H1/F21 launch), the expanded value proposition of Mogo's digital wallet, with lending, prepaid card, high-interest savings, and bitcoin trading, now more closely resembles SQ's (Not Rated) Cash App (particularly with SQ recently piloting consumer lending), setting it up to benefit from the same powerful network effects that has fueled SQ's phenomenal growth to-date. With 2021 shaping up to be a marquee year for fintech IPOs with several high-profile listings anticipated from the likes of Robinhood, Coinbase, and SoFi, we expect to see a greater spotlight on the sector and on Mogo, which should help unlock the significant value inherent in the company's platform that is not being reflected in the stock's valuation today. With the secular shift to online payments and digital financial services accelerating post the pandemic, we see Mogo as well positioned to execute on an expanding market opportunity. We see a compelling risk/reward on shares and raise our target to $10/share (was $5/share) based on our view for a significantly elevated platform value post Carta given exposure to higher-value payments, a more diversified revenue profile, and a global footprint. Reiterate BUY. | | |