Post by
ndiamond on Jan 12, 2022 11:40am
HC Wainright - $8.00 USD with huge upside to re-rate higher
MOGO is trading at such a deep discount to the peer group. Way oversold / undervalued.
Valuation. We are valuing shares of MOGO at $8 USD, down from $12 previously. Our $8 USD price target on shares of MOGO represents approximately 185% upside from recent trading levels. Our $8 USD price target reflects $6 per share of value for the existing Mogo business, which we value at 5.0x our 2022 revenue estimate of C$76.8M, a meaningful discount to our fintech peer group which even after recent multiple compression trade at average EV/revenue multiples closer to 10.0x to 14.0x 2022 revenue. We value the company's total potential investment in crypto exchange platform Coinsquare at approximately $2 per MOGO share based on a 40% discount to the current 2022 EV/revenue multiple for larger crypto exchange Coinbase Global, Inc. (COIN; not rated). This suggests to us the current price of MOGO shares does not reflect the intrinsic value of the existing business, let alone any value for the company’s meaningful investment in Coinsquare. Longer term, we believe the company is positioned to deliver improving financial performance, which, in our view, would warrant significant multiple expansion over the coming years.