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MoneyLion Declines 32% Year to Date: Should You Buy the Stock Now?
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MoneyLion Inc.’s (ML - Free Report) shares lost 32.1% year to date against 5.9% growth of the industry and 21.5% rise of the Zacks S&P 500 composite.
ML’s decline is in stark contrast to its close competitors, such as Paysafe Limited (PSFE - Free Report) and Shift4 Payments, Inc. (FOUR - Free Report) , whose shares rallied 72.4% and 17%, respectively, over the same period.
YTD Price Performance
Image Source: Zacks Investment Research
While the year-to-date performance paints a dull picture, looking at the one-year movement is crucial for a better understanding of the stock. ML has surged 98% over the past year, suggesting that the stock is currently in a correction phase.
Given the recent decline in ML’s shares, investors might be inclined to buy the stock. But, is this the right time to take the leap? Let’s find out.
MoneyLion’s Remarkable Customer Growth and Engagement
The company is the first digital ecosystem for consumer finance. Unlike its competitors, it has implemented a complete ecosystem strategy. Also, ML’s products and services are spread across commerce business services, content, and developer kits, with more in MoneyLion Labs. This overall strategy has resulted in total customer growth.
In the second quarter of 2024, ML’s customers grew 73% year over year and 10.4% sequentially. The company has observed robust product consumption across the first and third-party marketplace products. At the end of the second quarter of 2024, 27.7 million total products were consumed in ML’s platform.
The key strength behind MoneyLion’s ecosystem lies in its financial marketplace. Enterprise revenues increased 17% sequentially in the second quarter of 2024. This strengthend the company’s positioning to diversify its revenues across multiple financial verticals. ML’s consumer marketplace is a part of its Enterprise revenues that has been and will continue to be a strong area of growth.
Consumers can engage with MoneyLion’s ecosystem in multiple ways. The direct-to-consumer product has been showing great scale. It is helping consumers to learn, search and get introduced to topics related to money. The product is part of the company’s strategy to build the best commerce solution for financial products. Consumers can access ML’s financial marketplace in a data-driven way and personalize their financial situation. They can also take any of its first-party features that have been provided already. MoneyLion is helping customers save money by offering a high-quality financial platform and WOW membership, which reduces fees. The combination of MoneyLion’s strong foundation and strategic approach paves the path for its long-term success in the competitive consumer finance market.
MoneyLion’s Stock Valuation: Potential for Growth
Despite the impressive rally over the past year, MoneyLion stock remains relatively inexpensive, indicating potential for further appreciation. If we look at the Price/Earnings ratio, ML shares trade at 9.52X forward earnings, well below the industry’s 22.49X. Based on Price-to-Sales, ML is trading at 0.76X, lower than the industry’s 6.75X.
Image Source: Zacks Investment Research
<Image Source: Zacks Investment Research
Closing at $44.52 in the last trading session, the stock stands 139.9% below its 52-week high of $106.82. Furthermore, ML is trading below its 50-day moving average, indicating a bearish sentiment among investors.
Robust Liquidity Position for MoneyLion
ML’s current ratio of 2.85 at the end of the second quarter of 2024 was higher than the industry’s 1.15. A current ratio above 1 indicates that the company can meet its short-term obligations with ease.
ML’s Top and Bottom-Line Outlook Appears Strong
The Zacks Consensus Estimate for ML’s 2024 sales is pegged at $529.1 million, indicating year-over-year growth of 25%. Revenues for 2025 are anticipated to increase 21.2% year over year.
The consensus estimate for 2024 bottom line has gone up from a loss of $4.6 to earnings of $1.4.Earnings for 2025 are expected to rise 299% year over year.
Consider Waiting for a Better Entry Point
ML’s customer growth, engagement and product adoption are impressive. This, when coupled with strong top and bottom-line prospects and a healthy liquidity position, serves well for investors.
However, looking at the stock’s recent performance, we can conclude that MoneyLion has been riding through a correction phase. Therefore, we suggest potential investors to remain patient and watch for further share price adjustments before buying.
Image: Bigstock
MoneyLion Declines 32% Year to Date: Should You Buy the Stock Now?
MoneyLion Inc.’s (ML - Free Report) shares lost 32.1% year to date against 5.9% growth of the industry and 21.5% rise of the Zacks S&P 500 composite.
ML’s decline is in stark contrast to its close competitors, such as Paysafe Limited (PSFE - Free Report) and Shift4 Payments, Inc. (FOUR - Free Report) , whose shares rallied 72.4% and 17%, respectively, over the same period.
YTD Price Performance
While the year-to-date performance paints a dull picture, looking at the one-year movement is crucial for a better understanding of the stock. ML has surged 98% over the past year, suggesting that the stock is currently in a correction phase.
Given the recent decline in ML’s shares, investors might be inclined to buy the stock. But, is this the right time to take the leap? Let’s find out.
MoneyLion’s Remarkable Customer Growth and Engagement
The company is the first digital ecosystem for consumer finance. Unlike its competitors, it has implemented a complete ecosystem strategy. Also, ML’s products and services are spread across commerce business services, content, and developer kits, with more in MoneyLion Labs. This overall strategy has resulted in total customer growth.
In the second quarter of 2024, ML’s customers grew 73% year over year and 10.4% sequentially. The company has observed robust product consumption across the first and third-party marketplace products. At the end of the second quarter of 2024, 27.7 million total products were consumed in ML’s platform.
The key strength behind MoneyLion’s ecosystem lies in its financial marketplace. Enterprise revenues increased 17% sequentially in the second quarter of 2024. This strengthend the company’s positioning to diversify its revenues across multiple financial verticals. ML’s consumer marketplace is a part of its Enterprise revenues that has been and will continue to be a strong area of growth.
Consumers can engage with MoneyLion’s ecosystem in multiple ways. The direct-to-consumer product has been showing great scale. It is helping consumers to learn, search and get introduced to topics related to money. The product is part of the company’s strategy to build the best commerce solution for financial products. Consumers can access ML’s financial marketplace in a data-driven way and personalize their financial situation. They can also take any of its first-party features that have been provided already. MoneyLion is helping customers save money by offering a high-quality financial platform and WOW membership, which reduces fees. The combination of MoneyLion’s strong foundation and strategic approach paves the path for its long-term success in the competitive consumer finance market.
MoneyLion’s Stock Valuation: Potential for Growth
Despite the impressive rally over the past year, MoneyLion stock remains relatively inexpensive, indicating potential for further appreciation. If we look at the Price/Earnings ratio, ML shares trade at 9.52X forward earnings, well below the industry’s 22.49X. Based on Price-to-Sales, ML is trading at 0.76X, lower than the industry’s 6.75X.
Closing at $44.52 in the last trading session, the stock stands 139.9% below its 52-week high of $106.82. Furthermore, ML is trading below its 50-day moving average, indicating a bearish sentiment among investors.
Robust Liquidity Position for MoneyLion
ML’s current ratio of 2.85 at the end of the second quarter of 2024 was higher than the industry’s 1.15. A current ratio above 1 indicates that the company can meet its short-term obligations with ease.
ML’s Top and Bottom-Line Outlook Appears Strong
The Zacks Consensus Estimate for ML’s 2024 sales is pegged at $529.1 million, indicating year-over-year growth of 25%. Revenues for 2025 are anticipated to increase 21.2% year over year.
The consensus estimate for 2024 bottom line has gone up from a loss of $4.6 to earnings of $1.4.Earnings for 2025 are expected to rise 299% year over year.
Consider Waiting for a Better Entry Point
ML’s customer growth, engagement and product adoption are impressive. This, when coupled with strong top and bottom-line prospects and a healthy liquidity position, serves well for investors.
However, looking at the stock’s recent performance, we can conclude that MoneyLion has been riding through a correction phase. Therefore, we suggest potential investors to remain patient and watch for further share price adjustments before buying.
ML carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.