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 [1] to view the full report.
All reports published by Edison are available to download free of charge
from its website
www.edisongroup.com [2]
About Edison: Edison is an investment research and advisory company, with
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For more information please contact Edison:
Katherine Thompson, +44 (0)20 3077 5730
tech@edisongroup.com
Learn more at www.edisongroup.com [2] and connect with Edison on:
LinkedIn https://www.linkedin.com/company/edison-investment-research [4]
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1008613 26-March-2020
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(END) Dow Jones Newswires
March 26, 2020 12:14 ET (16:14 GMT)
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