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Bull of the Day: Money Lion (ML)

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Make no mistake, it’s rough out there kids. The stock market is having itself a rough go of it lately. Ever since that carry trade started to unwind in the “Land of the Rising Sun” things just haven’t been the same. It can feel like the whole world is collapsing down on you. Some look at that with despair. In reality, you should be looking at it as the opportunity that it is. The opportunity to add some great stocks on the cheap.

Great stocks like today’s Bull of the Day, Zacks Rank #1 (Strong Buy) Money Lion ((ML - Free Report) ). Money Lion is in the Financial Transaction Services industry which ranks in the Top 32% of our Zacks Industry Rank. a financial technology company, provides personalized products and financial content for American consumers. The company's platform offers access to banking, borrowing, and investing solutions for customers. It’s similar to a company like SoFi, at a fraction of the market cap.

The company just reported EPS of 26 cents last quarter, when analysts were calling for a 1-cent loss. Normally, that sort of surprise profitability is a good thing. In this case, the stock continued its dramatic selloff, down from heights around $100 just a few short months ago.

The growth numbers are staggering on this name. Current year revenue growth calls for 23.94% growth this year and 21.32% next year. That translates to 131% EPS growth this year and 280% growth next year. Next year’s Zacks Consensus Estimate is now forecast to come in at $5.51. That’s a big number for a stock with that much growth that is currently trading in the mid $40s.

Zacks Investment Research
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A quick look at the Price, Consensus and EPS Surprise Chart shows the divergence between the stock’s price and earnings. While earnings estimate revisions have continued to push to the upside, the stock is well off its highs. Eventually, one of two things typically happen. Either the stock’s price rallies to keep up with the revisions, or revisions come crashing down. With earnings beats and analysts upping the ante, the divergence has continued for several quarters now.


 


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