EDISON INVESTMENT RESEARCH LIMITED Edison Investment Research Limited: Edison issues outlook on Boku (BOKU)

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26/03/2020 17:14

Edison Investment Research Limited
Edison Investment Research Limited: Edison issues outlook on Boku (BOKU)

26-March-2020 / 16:14 GMT/BST


 

London, UK, 26 March 2020

Edison issues outlook on Boku (BOKU)

Boku reported FY19 results that were largely in line with its January trading update. The Payments division doubled adjusted EBITDA in FY19 highlighting the scale benefits of this business, while the Identity division saw a reduced EBITDA loss on revenue growth of 26%. As COVID-19 is currently having limited net impact on the business, we make only minor changes to forecasts. We note that increased volumes in the Payments business, as people seek digital entertainment while self-isolating, could drive upside to our FY20 forecasts.

 

Boku is trading at a discount to the average of payment processor peers and identity management peers on an EV/sales and EV/EBITDA basis. However, we believe that the investment Boku is currently making in the Identity business is masking the performance of the Payments business. As the two business have different growth and profitability dynamics, we take a sum-of-the-parts approach to assign value to each separately, generating a group equity value of $352m or 117p per share. Excluding the Identity business entirely, the group would be worth $327m or 108p per share, still well ahead of the current share price. Key catalysts for the share price include evidence of growth in the Boku Identity business, new major merchants being signed up in either business or a growing contribution from the wallets service.  

 
Click here to view the full report.

 

All reports published by Edison are available to download free of charge from its website

www.edisongroup.com

About Edison: Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Edison is authorised and regulated by the Financial Conduct Authority.

Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.

For more information please contact Edison:

Katherine Thompson, +44 (0)20 3077 5730

tech@edisongroup.com

 

Learn more at www.edisongroup.com and connect with Edison on: 

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