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MoneyLion (ML) Surges 16% Year to Date: Get it or Let it Go?
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MoneyLion Inc. (ML - Free Report) has had an impressive run so far this year. The stock has surged 16%, significantly outperforming the 2.3% rally of the industry it belongs to.
This surge aligns with the performance of its close competitors, Ally Financial Inc. (ALLY - Free Report) , which has risen 14.6%, and Intuit Inc. (INTU - Free Report) , which has rallied 6.5% over the same period.
ML’s upward trajectory can be attributed to MoneyLion's scalable solutions, diverse partnerships and a cash-back initiative designed to boost traffic.
Image Source: Zacks Investment Research
Looking beyond the year-to-date performance, MoneyLion's stock has surged an extraordinary 538% over the past year. These price dynamics indicate that a mid-way correction is complete, and the potential for further appreciation is high.
To better understand this potential, let's delve into a detailed analysis of the factors driving MoneyLion's success.
Customer Surge: A Testament to Excellence
MoneyLion is a fintech application aimed at low-credit borrowers and small-check investors. Its marketplace-first strategy and strong enterprise partner network drive cross-sell opportunities and revenue diversification. This approach enhances the company's ability to provide personalized financial decisions, detailed context, and community-driven insights, encouraging repeat usage.
MoneyLion has effectively integrated the strengths of marketplace and direct-to-consumer fintech business models. As a marketplace, the company can quickly scale product offerings, developing a network effect and information edge that appeals to more buyers and sellers. The direct-to-consumer aspect allows MoneyLion to maintain deep and direct relationships with its customers.
In its enterprise business, ML continues to increase channel partners and vertically integrate with product partners, establishing itself as an essential customer acquisition and monetization partner within the financial services ecosystem.
The company's customer base grew to 15.5 million in the first quarter of 2024, a 98% year-over-year increase, representing strong market penetration and consumer trust. Net revenues rose 29% year over year, showcasing robust financial performance.
MoneyLion reported a net income of $7.1 million for the quarter, a significant improvement from a net loss of $9.2 million in the first quarter of 2023. Adjusted EBITDA also saw a substantial increase, reaching $23.5 million compared to $7.3 million in the same period the previous year.
Stock Valuation: Room for Further Appreciation
Despite the impressive rally over the past year, MoneyLion's stock remains relatively inexpensive, indicating potential for further appreciation. If we look at the Price/Earnings ratio, ML shares currently trade at 21.43X forward earnings, very close to the industry’s 21.29X. Based on EV-to-EBITDA, ML is currently trading at 12.54X, close to the industry’s 11.86X.
Closing at $75.42 in the last trading session, the stock stands almost 42% below its 52-week high of $106.82. Furthermore, ML is trading below its 50-day moving average, indicating the right opportunity now to accumulate the stock.
ML Stock Trades Below 50-Day Average
Image Source: Zacks Investment Research
Strong Liquidity: Ensuring Obligations Are Met
MoneyLion's liquidity position is robust, with a current ratio of 2.64 at the end of the first quarter of 2024, compared to the industry’s 1.24. A current ratio above 1 indicates that the company can comfortably meet its short-term obligations. Notably, MoneyLion has no long-term debt, further strengthening its financial stability.
Image Source: Zacks Investment Research
Top and Bottom Line: Growth Prospects Strong
The Zacks Consensus Estimate for ML’s 2024 sales stands at $524.8 million, suggesting year-over-year growth of 23.9%. Revenues for 2025 are expected to increase 21.3% year over year.
The estimate for the 2024 bottom line has gone up from a loss of 6 cents to earnings of $1.45 in the past 60 days, suggesting year-over-year growth of 131.3%%. Earnings for 2025 are expected to increase 280% year over year.
MoneyLion: A Must Buy
MoneyLion presents a compelling investment opportunity. Despite significant price increases, the stock remains relatively less expensive, suggesting room for further growth. The company's effective business model, strong top and bottom-line growth prospects, expanding customer base, and healthy liquidity position, all contribute to its potential for continued success.
MoneyLion's robust financial health and positive growth outlook make it a must-buy for investors seeking exposure to the fintech sector. The company's strategic initiatives and strong market position are likely to drive further appreciation in the stock price, making it an attractive investment opportunity.
Image: Bigstock
MoneyLion (ML) Surges 16% Year to Date: Get it or Let it Go?
MoneyLion Inc. (ML - Free Report) has had an impressive run so far this year. The stock has surged 16%, significantly outperforming the 2.3% rally of the industry it belongs to.
This surge aligns with the performance of its close competitors, Ally Financial Inc. (ALLY - Free Report) , which has risen 14.6%, and Intuit Inc. (INTU - Free Report) , which has rallied 6.5% over the same period.
ML’s upward trajectory can be attributed to MoneyLion's scalable solutions, diverse partnerships and a cash-back initiative designed to boost traffic.
Looking beyond the year-to-date performance, MoneyLion's stock has surged an extraordinary 538% over the past year. These price dynamics indicate that a mid-way correction is complete, and the potential for further appreciation is high.
To better understand this potential, let's delve into a detailed analysis of the factors driving MoneyLion's success.
Customer Surge: A Testament to Excellence
MoneyLion is a fintech application aimed at low-credit borrowers and small-check investors. Its marketplace-first strategy and strong enterprise partner network drive cross-sell opportunities and revenue diversification. This approach enhances the company's ability to provide personalized financial decisions, detailed context, and community-driven insights, encouraging repeat usage.
MoneyLion has effectively integrated the strengths of marketplace and direct-to-consumer fintech business models. As a marketplace, the company can quickly scale product offerings, developing a network effect and information edge that appeals to more buyers and sellers. The direct-to-consumer aspect allows MoneyLion to maintain deep and direct relationships with its customers.
In its enterprise business, ML continues to increase channel partners and vertically integrate with product partners, establishing itself as an essential customer acquisition and monetization partner within the financial services ecosystem.
The company's customer base grew to 15.5 million in the first quarter of 2024, a 98% year-over-year increase, representing strong market penetration and consumer trust. Net revenues rose 29% year over year, showcasing robust financial performance.
MoneyLion reported a net income of $7.1 million for the quarter, a significant improvement from a net loss of $9.2 million in the first quarter of 2023. Adjusted EBITDA also saw a substantial increase, reaching $23.5 million compared to $7.3 million in the same period the previous year.
Stock Valuation: Room for Further Appreciation
Despite the impressive rally over the past year, MoneyLion's stock remains relatively inexpensive, indicating potential for further appreciation. If we look at the Price/Earnings ratio, ML shares currently trade at 21.43X forward earnings, very close to the industry’s 21.29X. Based on EV-to-EBITDA, ML is currently trading at 12.54X, close to the industry’s 11.86X.
Closing at $75.42 in the last trading session, the stock stands almost 42% below its 52-week high of $106.82. Furthermore, ML is trading below its 50-day moving average, indicating the right opportunity now to accumulate the stock.
ML Stock Trades Below 50-Day Average
Strong Liquidity: Ensuring Obligations Are Met
MoneyLion's liquidity position is robust, with a current ratio of 2.64 at the end of the first quarter of 2024, compared to the industry’s 1.24. A current ratio above 1 indicates that the company can comfortably meet its short-term obligations. Notably, MoneyLion has no long-term debt, further strengthening its financial stability.
Top and Bottom Line: Growth Prospects Strong
The Zacks Consensus Estimate for ML’s 2024 sales stands at $524.8 million, suggesting year-over-year growth of 23.9%. Revenues for 2025 are expected to increase 21.3% year over year.
The estimate for the 2024 bottom line has gone up from a loss of 6 cents to earnings of $1.45 in the past 60 days, suggesting year-over-year growth of 131.3%%. Earnings for 2025 are expected to increase 280% year over year.
MoneyLion: A Must Buy
MoneyLion presents a compelling investment opportunity. Despite significant price increases, the stock remains relatively less expensive, suggesting room for further growth. The company's effective business model, strong top and bottom-line growth prospects, expanding customer base, and healthy liquidity position, all contribute to its potential for continued success.
MoneyLion's robust financial health and positive growth outlook make it a must-buy for investors seeking exposure to the fintech sector. The company's strategic initiatives and strong market position are likely to drive further appreciation in the stock price, making it an attractive investment opportunity.
ML currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.