Mogo Finance Technology (MOGO) AI Stock Analysis

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Mogo Finance Technology

(TSX:MOGO)

44Neutral

Mogo Finance Technology's overall score reflects current challenges in profitability despite revenue growth and positive cash flow trends. Technical indicators and valuation suggest caution, while the earnings call presents a mixed outlook with improved guidance and potential headwinds.

Positive Factors

Financial Strategy

The ability to generate cash internally removes the risk of a dilutive capital raise, which has been a headwind for MOGO shares.

Market Conditions

A declining Fed Funds rate should reduce borrowing costs on Mogo’s credit facility, driving improvements to cash flow.

Profitability

The company has shifted towards improved profitability and sustainability, with higher gross margin and meaningfully lower operating expenses leading to adjusted EBITDA above the forecast.

Negative Factors

Crypto Exposure

The company's investment portfolio has meaningful exposure to crypto, which it could choose to monetize under favorable conditions.

Historical Stock Performance

MOGO shares traded as high as $35 on a split adjusted basis as recently as 2021 while generating less revenue and significant adj. EBITDA losses.

Market Speculation

The potential return of former President Donald Trump, a proponent of cryptocurrencies, could serve as a catalyst for MOGO shares due to its significant crypto exposure.

Mogo Finance Technology (MOGO) vs. S&P 500 (SPY)

Market Cap

$30.84M

Dividend YieldN/A

Average Volume (3M)29.09K

Price to Earnings (P/E)―

Beta (1Y)1.83

Revenue Growth8.35%

EPS Growth84.36%

CountryCA

Employees255

SectorTechnology

Sector Strength40

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)-0.56

Shares Outstanding24,472,378

10 Day Avg. Volume38,241

30 Day Avg. Volume29,094

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.79

Price to Cash Flow (P/CF)5.40

P/FCF Ratio2.50

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$4.29

Price Target Upside283.09% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Mogo Finance Technology Business Overview & Revenue Model

Company DescriptionMogo Finance Technology Inc. (MOGO) is a Canadian-based financial technology company that offers a range of digital financial solutions aimed at helping consumers manage and improve their financial health. The company's products include personal loans, a digital spending account, credit score monitoring, identity fraud protection, and a digital mortgage solution. Mogo's platform is designed to provide a simple and convenient way for users to engage with various financial services through a single app.

How the Company Makes MoneyMogo Finance Technology generates revenue through multiple streams primarily centered around its digital financial services. The company earns money from interest income on personal loans it provides to consumers, which is a significant part of its revenue model. Additionally, Mogo charges subscription fees for premium services like credit score monitoring and identity fraud protection. The company also earns transaction-based revenue from its digital spending account, where users can perform transactions. Mogo partners with financial institutions and other companies to expand its service offerings, which can lead to additional revenue through referral agreements or shared services. Furthermore, Mogo leverages its technology platform to offer white-label solutions to other businesses, providing another revenue stream.

Mogo Finance Technology Financial Statement Overview

Summary

Mogo Finance Technology is experiencing revenue growth but faces challenges with high costs leading to negative profitability metrics. The balance sheet shows moderate leverage but declining equity, posing financial risks. Recent positive shifts in cash flow are promising but need to be sustained.

Income Statement

Negative

Mogo Finance Technology has shown a notable increase in revenue from the previous period, but the company is struggling with negative gross profit and net margins, indicating high costs relative to revenue. The EBIT and EBITDA margins are significantly negative, reflecting operational inefficiencies and potentially high fixed costs.

Balance Sheet

Neutral

The company has a moderate debt-to-equity ratio, suggesting a balanced use of leverage. However, the negative return on equity and low equity ratio highlight challenges in generating returns for shareholders and maintaining financial stability. The decline in stockholders' equity indicates potential risks.

Cash Flow

Neutral

There is a positive shift in operating cash flow and free cash flow, suggesting improvements in cash generation. The free cash flow to net income ratio is positive, indicating better cash management, although the company has faced challenges in previous years.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
70.14M	64.83M	68.95M	57.52M	44.24M	59.80M
	Gross Profit
-2.33B	46.27M	46.24M	46.04M	35.50M	41.02M
	EBIT
-2.37B	-3.88M	-33.48M	-33.94M	2.31M	-3.65M
	EBITDA
9.97M	-2.20M	-43.53M	-4.46M	2.13M	17.01M
	Net Income Common Stockholders
-15.55M	-17.89M	-165.68M	-33.21M	-26.98M	-21.92M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	16.13M	29.27M	69.21M	12.12M	5.37M
	Total Assets
0.00	207.76M	221.49M	393.87M	104.47M	151.10M
	Total Debt
0.00	88.90M	87.73M	88.72M	91.39M	5.21M
	Net Debt
0.00	72.76M	58.46M	19.52M	79.27M	-159.00K
	Total Liabilities
0.00	114.04M	110.61M	124.09M	99.23M	149.35M
	Stockholders Equity
-32.45M	93.72M	110.89M	269.78M	5.24M	-92.75M
Cash Flow		Free Cash Flow
7.88M	-12.59M	-34.95M	-37.61M	38.99M	-24.30M
	Operating Cash Flow
11.51M	-9.17M	-27.01M	-29.64M	43.80M	-15.21M
	Investing Cash Flow
-18.78M	-3.09M	-9.15M	-39.59M	-4.82M	-9.09M
	Financing Cash Flow
-673.00K	-1.02M	-3.08M	125.86M	-37.28M	14.27M

Mogo Finance Technology Technical Analysis

Technical Analysis Sentiment

Negative

Last Price1.12

Price Trends

50DMA

1.50

Negative

100DMA

1.72

Negative

200DMA

1.73

Negative

Market Momentum

MACD

-0.07

Negative

RSI

34.71

Neutral

STOCH

25.00

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MOGO, the sentiment is Negative. The current price of 1.12 is below the 20-day moving average (MA) of 1.30, below the 50-day MA of 1.50, and below the 200-day MA of 1.73, indicating a bearish trend. The MACD of -0.07 indicates Negative momentum. The RSI at 34.71 is Neutral, neither overbought nor oversold. The STOCH value of 25.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:MOGO.

Mogo Finance Technology Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GEO	75 Outperform	C$118.85M	9.41	7.94%	―	11.18%	137.62%
CTS	71 Outperform	C$1.13B	―	-37.61%	0.92%	-4.18%	-13856.25%
Sector *	57 Neutral	$20.24B	9.51	-13.28%	2.72%	5.43%	-24.54%
HUT	49 Neutral	C$1.85B	3.51	2.56%	―	199.41%	―
MOGO	44 Neutral	$30.84M	―	-16.02%	―	8.35%	84.36%
DYA	28 Underperform	C$71.31M	―	2492.91%	―	19.47%	-9.09%

* Technology Sector Average

Performance Comparison

TSE:MOGO

Mogo Finance Technology

1.12

-1.58

-58.52%

TSE:CTS

Converge Technology Solutions Corp

5.98

0.74

14.12%

TSE:GEO

Geodrill

2.51

0.29

13.06%

TSE:HUT

Hut 8

16.40

5.75

53.99%

TSE:DYA

dynaCERT

0.16

0.01

6.67%

Mogo Finance Technology Earnings Call Summary

Earnings Call Date: Mar 20, 2025 | % Change Since: -25.33% | Next Earnings Date: May 8, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted growth in revenue, cash position, and assets under management, with a strategic shift towards wealth and payments segments. However, the exit from the institutional brokerage business, decline in interest revenue, and cautious lending approach were notable negatives. Overall, the highlights and lowlights were balanced.

Highlights

Revenue Growth in 2024

Mogo Inc. grew revenue by 9% to $71.2 million in 2024, with a 16% increase in wealth revenue and a 21% increase in payments revenue.

Strong Cash and Investments Position

The company ended 2024 with $49.1 million in cash, marketable securities, and investments, an increase from $36.2 million in Q3.

Assets Under Management Growth

Assets under management in the wealth segment grew 22% year-over-year, reaching $428 million.

Payments Volume Increase

Payment volume processed increased by 16% year-over-year to $11.5 billion.

Subscription Services Revenue Growth

Subscription services revenue increased by 11% year-over-year.

Positive Net Income

The company reported a positive net income of $10.4 million for Q4 2024.

Strategic Focus on High-Growth Areas

Mogo is focusing on scaling wealth and payments segments, with projected revenues expected to grow by 20%-25% and mid to high teens, respectively, in 2025.

Lowlights

Exit from Institutional Brokerage Business

Mogo decided to exit its institutional brokerage business, which contributed $1.6 million in Q4 2024 but provided negligible operating margin.

Interest Revenue Decline

Interest revenue declined by 3% in Q4 2024, with a projected decrease of 8%-10% in 2025.

Adjusted EBITDA Decline

Adjusted EBITDA for 2024 was $6.7 million, a decrease from $7.7 million in 2023.

Cautious Approach to Lending

Due to economic uncertainty, Mogo is taking a cautious approach to lending, impacting interest revenue projections.

Company Guidance

During the Mogo Inc. Q4 2024 Financial Results Conference Call, the company provided a comprehensive update on its financial performance and strategic outlook. In 2024, Mogo achieved a 9% increase in revenue, reaching $71.2 million, largely fueled by a 16% rise in wealth revenue and a 21% increase in payments revenue. Adjusted EBITDA for the year was $6.7 million, aligning with the middle of the company's guidance range. The company reported $49.1 million in cash, marketable securities, and investments at year-end, up from $36.2 million in Q3. Assets under management in the wealth segment grew 22% year-over-year to $428 million, while payments revenue hit $8.6 million with a 16% increase in total payments volume to $11.5 billion. Looking forward, Mogo projects 20-25% growth in wealth revenue and mid to high teens growth in payments for 2025. The company is strategically exiting its institutional brokerage operations to focus on high-margin areas and extended its credit facility to 2029 with lower interest rates.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.