Moneylion Inc (ML) is a leading fintech powering the next generation of personalized financial products and content. Its principal products include:
Moneylion has a sterling management team in CEO Dee Choubey and CFO Rick Correia, both formerly of Citadel and other pedigreed firms like Goldman Sachs, Barclays and Merrill Lynch. A glance at Moneylion’s growth curve since the beginning of the decade quickly reveals how the co has benefitted under their stewardship:
On March 7, Moneylion posted impressive Q4 Earnings and Q1 Guidance. But just as important is a holistic overview of the full-year achievements for the company. Investors can see that ML was able to generate record Revenue and Adj EBITDA, while exceeding its Gross Margin guidance AND that growth is poised to accelerate from here.
The Conference Call also hammered these points home. Note the various references to growth below.
Our marketplace solutions, technology advantage, customer acquisition and monetization products have set us up nicely as the gateway to American financial services. This diversification provides durability and importantly, it will continue to propel Moneylion forward and position the company for accelerating growth.
We're going to play offense while remaining disciplined on costs and we're very confident we can do this.
Also noteworthy was Management’s mention of the company’s first-ever quarter of GAAP profitability:
Q4 2023 also marked our fourth consecutive quarter of positive adjusted EBITDA, demonstrating our ability to scale while funding our growth through organic cash flow generation. And lastly, we're setting our sights on our next profitability milestone to reach our first positive GAAP EPS quarter in 2024 and the proof point is that we're getting really close.
It’s important to keep in mind that Moneylion’s compelling mix of First-Party and Third-Party Products is resonating extremely well with Customers and powering growth in its Customer Base. This is a key element to Moneylion’s success.
We ended 2023 with over 14M total customers, representing over 115% year-over-year growth. This means we added more than 7.5M total customers in 2023. And next to total products, over 23M total products were consumed on our platform through the end of 2023, compared to 12.9M at the end of 2022. By the end of the fourth quarter of 2023, 48% of the products consumed were third party products, up from 26% through Q4 2022.
Finally, Management made a point of emphasizing the company is well on its way to becoming a Rule of 40 Company - meaning new level of consistent growth and profitability.
We are rapidly approaching the Rule of 40, which represents the concept that a company's revenue growth rate and profitability margin should equal or exceed 40. We believe this is an important target for us as we aim to strike the right balance of growth and profitability. In 2023, our revenue growth was 24% year-over-year and our adjusted EBITDA margin was 11%, representing a total of 35.
Given Management’s confident and bullish overtones for the year ahead, the thesis for Moneylion is pretty straightforward: The stock is cheap. Current Estimates are too low. And catalysts remain. Let’s take a look.
Catalysts:
So it's early innings, but we do expect it to be fairly meaningful to our contribution later this year and certainly in 2025…
We didn't make a big splash with EY, because this is going to be small. And so when we think about the fee pools that are available, it's in the $20 billion range. And as you know, when MoneyLion sets its sights on a fee pool, we take market share.
With growth poised to accelerate meaningfully in ‘24, the stock set to be institutionalized, as well as its tight float, Moneylion as all the key elements of a Top Tier Inflection. We believe demand is poised to inflect and catalyze a move for ML to $100 during its next price extension.
Due to the thin trading volume and the current Market Volatility, we plan to average into the name over the coming days, utilizing VWAP buys and tactical entries as our means to arrive at our full position.
Be mindful that due to its thin trading volume, there is fairly large spread between the Bid n Ask!
STOP LOSS: Given our high-conviction level, we plan to use a TIME STOP (hold until Q1 earnings) to allow time for our thesis to play out. We RARELY use this tactic, saving it for only our highest-conviction picks.
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Disclosure: We are long ML stock. We may change our positioning at a moment’s notice, without notifying you of any such moves.
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