MoneyLion Earnings: Strong Customer Growth Justifies Valuation of 6x EBITDA
Price target: $125 by summer 2025.
Investment Thesis
MoneyLion (ML) delivered stronger growth than I had expected. Further, its guidance for 2024 implies that MoneyLion is growing at closer to 25% CAGR, rather than the 20% CAGR I had previously expected.
That being said, ML's profitability profile leaves a lot to be desired. After delivering very strong profitability in Q1 2024, its outlook for the remainder of 2024 doesn't shine quite as strongly. And this makes sense, MoneyLion is still in growth mode, it's not being operated with a view to maximizing its profitability right now.
Even as I recognize why the market is disenchanted with the business, I maintain that paying 6x next year's EBITDA forgives a lot of concerns, particularly given its very strong customer adoption figures.
Price target: $125 per share by summer 2025
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