OnMonday, MoneyLion Inc. (NYSE: ML) received a positive outlook from B.Riley, with the firm raising its price target on the company's shares to $127 from $102, while maintaining a Buy rating. The adjustment follows MoneyLion's strong fourth-quarter performance and promising initial earnings guidance for the first quarter of 2024.
The financial technology company reported a 19% increase in total revenue, reaching $113 million, and an adjusted EBITDA of $16.5 million. These figures aligned with B.Riley's revenue estimates and exceeded their EBITDA projections due to better-than-expected margin performance. The analyst noted the company's significant customer growth, with approximately 1.9 million new customers in the quarter, culminating in 14 million customers, marking a 115% year-over-year increase.
MoneyLion's management has also provided an adjusted EBITDA guidance range for the first quarter of 2024, projecting between $15 million and $18 million. This forecast surpasses B.Riley's earlier EBITDA estimate of $10.6 million and margin expectations.
The firm's revised adjusted EPS estimates for MoneyLion in 2024 and 2025 are now $4.50 and $7.50, respectively. B.Riley's analyst believes that MoneyLion's current trading value is considerably low for a platform company nearing the "Rule of 40" milestone, which indicates a balance of growth and profitability. The new price target of $127 is based on a 17x multiple of the firm's 2025 adjusted EPS forecast, suggesting a discount compared to the market and other high-growth, network-effect-driven business models.
In addition to the strong financial performance, B.Riley's updated outlook does not factor in potential gains from MoneyLion's new initiatives, such as the enterprise partnership with EY and the MoneyLion WOW subscription service. The firm suggests that these developments could provide additional conservative estimates for the company's future earnings.
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