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Needham has reaffirmed its positive stance on MoneyLion Inc. (NYSE: ML), maintaining a Buy rating and a $70.00 price target for the company's stock. The endorsement follows a series of investor meetings in Chicago and Milwaukee with MoneyLion's CEO Dee Choubey, CFO Rick Correia, and Sean Horgan from Investor Relations.
The financial technology company's core consumer and enterprise segments continue to exhibit strong performance. According to the firm's feedback, the health of MoneyLion's core consumer base remains robust, and the enterprise segment is expected to see an uptick in numbers as interest rates decline.
The firm also pointed out that MoneyLion's current valuation does not reflect its fundamental results or outlook. The stock is currently trading at around 5 times its forecasted FY25 EBITDA and 10 times its forecasted FY25 GAAP earnings per share. This discrepancy between price and performance is seen as an opportunity by Needham.
In light of these observations, MoneyLion has been added to the Needham Conviction List, taking the place of Equifax Inc . (NYSE: NYSE:EFX). The Conviction List is a collection of stocks that the firm holds in high regard and believes have significant upside potential.
In other recent news, MoneyLion Inc. reported a record Q2 revenue of $131 million and an adjusted EBITDA of $18.5 million. The digital finance platform saw a 73% year-over-year increase in its customer base, reaching 17 million users.
The company's enterprise revenue also experienced a 17% growth from the previous quarter. Looking ahead, MoneyLion's revenue guidance for Q3 2024 is projected between $133 million and $138 million, with full-year guidance of $525 million to $535 million.
In a strategic move, MoneyLion has authorized a $20 million stock repurchase program. The program allows for flexibility in execution, with no commitment to a specific number of shares or amount of stock. Analysts from EY have expressed a positive outlook on the company's efforts to develop embedded financial services for banks, which is expected to bolster MoneyLion's market position.
In a major development, MoneyLion and TransUnion (NYSE:TRU) have announced a partnership aimed at enhancing consumer finance personalization. Through this collaboration, MoneyLion will integrate TransUnion’s data and credit solutions into its credit-decisioning platform, offering consumers more tailored financial products.
InvestingPro Insights
Recent InvestingPro data and tips offer additional context to Needham's bullish stance on MoneyLion Inc. (NYSE: ML). The company's revenue growth remains strong, with a 23.75% increase in the last twelve months as of Q2 2024, reaching $475.07 million. This aligns with Needham's observation of robust performance in MoneyLion's core segments.
However, investors should note that MoneyLion's stock has faced significant headwinds recently. An InvestingPro Tip highlights that the stock has taken a big hit over the last week, with a 1-week price total return of -8.32%. This short-term volatility contrasts with the company's long-term potential emphasized by Needham.
Another relevant InvestingPro Tip indicates that MoneyLion's valuation implies a strong free cash flow yield, which could support Needham's view that the current stock price doesn't reflect the company's fundamental results or outlook.
For a more comprehensive analysis, InvestingPro offers 13 additional tips for MoneyLion, providing investors with a broader perspective on the company's financial health and market position.
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