New report on TrustBuddy published by Liberum Capital:
“New institutional lending capital of €12.3m in late December is likely to drive a 57% QoQ increase in volumes in 1Q14. More such capital due in 2Q14 suggests to us further volume acceleration in 2H14. Management sees 2014e volumes up 184% on the year. For 2015e, we increase our forecasts for revenue, by 15% due to increased visibility on loan capital, and for costs, by 73% due to the significant operational investment and continued expansion plans. Our SEK8.00 TP is unchanged with revenue and cost changes offsetting each other. Reiterate BUY, 250% upside.
Positive 2014 outlook
Mgmt optimistic on 2014 outlook, guide for 2014e lending volume of SEK1.5bn up 184% YoY. Consistent with 23rd Jan announcement run rate vol up 25% on December.
TBDY received a significant capital injection of €12.3m on 27th of December. Additional Institutional Capital expected in Q2.
Automation & other IT
New automated IT system will double employee’s loan capacity. TBDY partnership with Wirecard, and use of IFRAME will improve cash drag increase profitability.
TBDY trades currently on 4.7x 2014 revenues a significant 60% discount to Lending Club’s most recent transaction on 11.8x revenues. Reiterate BUY, TP SEK8.00.”