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On Wednesday, UBS analyst Neeraj Toshniwal reaffirmed the Sell rating and a price target of INR1,640.00 for PB Fintech (NSE:PBFI) Limited (POLICYBZ:IN). According to InvestingPro data, the company currently commands a market capitalization of $19.3 billion and trades at significant multiples, with a P/E ratio of 173.5x. Toshniwal’s statement followed a meeting with PB Fintech’s senior management during the UBS Asian Investment Conference 2025 in Hong Kong. The management team at PB Fintech expressed confidence in meeting their profitability goal of Rs10bn for the fiscal year 2027, citing a compound annual growth rate (CAGR) of 30% in new business and 35-40% in renewals.
The company outlined that achieving the desired run-rate in fresh business is crucial for reaching the forecasted profitability. PB Fintech’s management also noted the potential for EBITDA margin in their core business to rise to 40%, a significant increase from the 22% reported in the fourth quarter of the fiscal year 2025. The company already demonstrates strong operational efficiency with an impressive gross profit margin of 90.82% and maintains a healthy current ratio of 12.46, according to InvestingPro data. This increase in profitability is expected to be driven by the growth in both new and renewal business segments.
Despite the positive outlook for the core business, the company’s Point of Sales Persons (PoSP) business is projected to have a lower EBITDA margin, which is not anticipated to exceed 3-4%, even with scaling. This is in contrast to the new initiatives adjusted EBITDA margin, which is currently at -6% as of the fourth quarter of the fiscal year 2025. The management remains optimistic about the core business’s contribution margin, which could potentially reach 60% compared to the current 46%, although no specific timelines were provided for these milestones.
PB Fintech’s management team’s presentation at the conference highlighted the company’s strategic focus on growth and profitability. They believe that with the targeted growth rates in both new business and renewals, PB Fintech is well on its way to achieving its financial objectives. The company has already demonstrated strong momentum with revenue growth of 64.12% in the last twelve months. The detailed financial targets provided by the company reflect its commitment to improving margins and building a sustainable business model in the coming years. InvestingPro subscribers can access over 20 additional key metrics and insights about PB Fintech, including detailed growth projections and comprehensive financial health analysis, which currently rates as GOOD on the platform’s proprietary scoring system.
In other recent news, Reddit has reported a significant 61.5% increase in first-quarter revenue year-over-year, with strong performance in EBITDA. This announcement has led Seaport Global Securities to upgrade Reddit’s stock rating to Buy, setting a price target of $165. Despite this positive financial news, Reddit faces challenges with user growth, particularly in the U.S., as noted by Baird, which has lowered its price target to $120 while maintaining a Neutral rating. Similarly, Wells Fargo (NYSE:WFC) has downgraded Reddit from Overweight to Equal Weight, reducing the price target to $115, citing potential long-term impacts from Google (NASDAQ:GOOGL)’s advancements in AI search features. BofA Securities has maintained a Neutral rating on Reddit with a $130 price target, highlighting the potential revenue boost from Reddit’s new Dynamic Product Ads. Meanwhile, Redburn-Atlantic has reiterated its Sell rating with a $75 price target, expressing concerns about the impact of AI-driven search on Reddit’s user engagement and revenue. These developments underscore the mixed analyst perspectives on Reddit’s future amid evolving digital landscapes and strategic shifts.
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