Mogo Inc T.MOGO

HC Wainright - $12 USD price target on MOGO

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3Q21 Beat Up and Down the P&L, Momentum Continues Into 2022 on Revenue Acceleration and MogoTrade; Reit Buy, $12 PT

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3Q21 beat on revenue and EBITDA, outlook highlights positive momentum and management visibility. Prior to the market open on November 10, Mogo, Inc. reported better than expected 3Q21 operating results, driven by higher revenue, C$15.4M versus our C$14.1M estimate. More importantly, in our view, the company increased its previously issued revenue guidance for both 4Q21 and full year 2022. The company now expects 2022 revenue of between C$75.0M to C$80.0M, up from C$70.0M to C$75.0M previously. The increase in 2022 guidance highlights the positive business momentum as the company continues to improve engagement with a large 1.7M, and growing, member base as well as management’s visibility into the business. Further, we believe only a modest contribution from MogoTrade, which is set to launch in 4Q21, is included in 2022 revenue guidance, suggesting a potential upward bias to numbers. Long term, we believe MogoTrade could represent a C$50.0M annual revenue business. As high-margin subscription and service revenue continue to accelerate, we expect to see significant operating leverage in the model become more apparent to investors. As the company continues to execute against its strategy and operating results continue to show signs of meaningful improvement, we expect MOGO shares to re-rate at valuation levels more similar to high quality financial technology peers, ultimately driving shares towards our $12 price target over the next 12 months.