Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/moneylion-inc" target="_blank" data-smartkarma-citation="entities:34686:1" rel="noopener">MoneyLion (ML US)</a> , one of the fastest growing fintech companies, went public via SPAC in February and shares were listed on the NYSE in September. The company merged with SPAC Fusion Acquisition at combined enterprise value of ~$2.4 billion, PIPE investors acquired 25 million Class A shares for $10.00 per share and private placement was closed prior to close of business combination. Therefore, MoneyLion has raised $250 million from investors such as BlackRock and private equity firm Apollo Global Management. Citibank, Broadhaven and FT Partners served as financial advisors to MoneyLion while J.P. Morgan Securities acted as financial advisor to Fusion.</p>

MoneyLion (ML US) , one of the fastest growing fintech companies, went public via SPAC in February and shares were listed on the NYSE in September. The company merged with SPAC Fusion Acquisition at combined enterprise value of ~$2.4 billion, PIPE investors acquired 25 million Class A shares for $10.00 per share and private placement was closed prior to close of business combination. Therefore, MoneyLion has raised $250 million from investors such as BlackRock and private equity firm Apollo Global Management. Citibank, Broadhaven and FT Partners served as financial advisors to MoneyLion while J.P. Morgan Securities acted as financial advisor to Fusion.

MoneyLion: The Downside Looks Limited and Valuations Remain Attractive

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<header id="article-header_2-0"><p data-tooltip="Khadija Khartit is a strategy, investment, and funding expert, and an educator of fintech and strategic finance in top universities. She has been an investor, entrepreneur, and advisor for more than 25 years. She is a FINRA Series 7, 63, and 66 license holder." data-inline-tooltip="true" data-tooltip-position-x="left" data-tooltip-position-y="top">Founded in 2013, <a href="https://www.smartkarma.com/entities/moneylion-inc" target="_blank" data-smartkarma-citation="entities:34686:1" rel="noopener">MoneyLion (ML US)</a> is a fintech company that provides lending, mobile banking, cash advances, financial advisory, and investment services including crypto trading to its users. The company aims to empower mobile banking and other financial products through machine learning and artificial intelligence technologies. Since its launch in 2013, MoneyLion has engaged with nearly 8.7 million users. </p></header><p data-tooltip="Khadija Khartit is a strategy, investment, and funding expert, and an educator of fintech and strategic finance in top universities. She has been an investor, entrepreneur, and advisor for more than 25 years. She is a FINRA Series 7, 63, and 66 license holder." data-inline-tooltip="true" data-tooltip-position-x="left" data-tooltip-position-y="top">In February 2021,<a href="https://www.reuters.com/technology/mobile-bank-moneylion-go-public-via-blank-check-merger-29-bln-deal-2021-02-12/" target="_blank" rel="noopener"> MoneyLion</a> agreed to go public through a merger with a blank-check firm Fusion Acquisition Corp <a href="https://www.reuters.com/companies/FUSE.N" target="_blank" rel="noopener">(FUSE.N)</a>, that would value the equity of the combined company at $2.9 billion. As of 26 October 2021, MoneyLion's market cap is $1.4 billion. MoneyLion completed its public listing on the NYSE in September 2021.</p><div class="content-highlight">
<h2>Valuation</h2>
<p>Our base case valuation of MoneyLion over the next year is $9.5 per share, which would be 59% higher than current share price. Our base case valuation is based on EV/S of 7.5x using our estimated sales of $257 million in 2022. We took a 10% discount to the company's guidance sales in 2022 to be more conservative. </p>
<p>The EV/S multiple of 7.5x is about 50% discount to the average EV/S multiple of its peers, which is mainly due to its lower operating margins and size effect. However, if the company is able to generate higher sales growth and more sizeable improvement to operating margins than its peers in the next several quarters, this valuation discount is likely to decline considerably. </p>
<p>Unlike in 2H 2020 to 1Q 2021 when there was a much positive sentiment on SPACs and SPAC related mergers, this sentiment has worsened considerably in the past six months. This is probably one of the reasons why the stock has taken such a beating since going public in the past month. We would argue that the fundamentals of the company is improving and the financial metrics of MoneyLion remain solid. Therefore, we would be a Buyer of <a href="https://www.smartkarma.com/entities/moneylion-inc" target="_blank" data-smartkarma-citation="entities:34686:1" rel="noopener">MoneyLion (ML US)</a> shares at current depressed levels.</p>
</div>

Founded in 2013, MoneyLion (ML US) is a fintech company that provides lending, mobile banking, cash advances, financial advisory, and investment services including crypto trading to its users. The company aims to empower mobile banking and other financial products through machine learning and artificial intelligence technologies. Since its launch in 2013, MoneyLion has engaged with nearly 8.7 million users. In February 2021, MoneyLion agreed to go public through a merger with a blank-check firm Fusion Acquisition Corp (FUSE.N), that would value the equity of the combined company at $2.9 billion. As of 26 October 2021, MoneyLion's market cap is $1.4 billion. MoneyLion completed its public listing on the NYSE in September 2021.
Valuation
Our base case valuation of MoneyLion over the next year is $9.5 per share, which would be 59% higher than current share price. Our base case valuation is based on EV/S of 7.5x using our estimated sales of $257 million in 2022. We took a 10% discount to the company's guidance sales in 2022 to be more conservative. 
The EV/S multiple of 7.5x is about 50% discount to the average EV/S multiple of its peers, which is mainly due to its lower operating margins and size effect. However, if the company is able to generate higher sales growth and more sizeable improvement to operating margins than its peers in the next several quarters, this valuation discount is likely to decline considerably. 
Unlike in 2H 2020 to 1Q 2021 when there was a much positive sentiment on SPACs and SPAC related mergers, this sentiment has worsened considerably in the past six months. This is probably one of the reasons why the stock has taken such a beating since going public in the past month. We would argue that the fundamentals of the company is improving and the financial metrics of MoneyLion remain solid. Therefore, we would be a Buyer of MoneyLion (ML US) shares at current depressed levels.


MoneyLion - An Oversold Fintech Stock Following a SPAC Merger

United States

MoneyLion Inc. provides financial technology solutions. The Company offers full-service digital platform to deliver mobile banking, lending, and investment solutions. MoneyLion serves clients in the United States.

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Moneylion (ML US)

MoneyLion: The Downside Looks Limited and Valuations Remain Attractive

MoneyLion shares look undervalued relative to peers and our 12-month price target of $9.00 per share implies ~50% upside

Andrei Zakharov

MoneyLion - An Oversold Fintech Stock Following a SPAC Merger

MoneyLion is an oversold fintech stock following a SPAC merger. Our base case valuation of MoneyLion over the next year is $9.5 per share, which...

Douglas Kim

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