Analyst Lowers PT On Monitise Plc 83%, Says Its Still A Buy
Monitise Plc, the mobile money company, backed by Omega Adviser's Leon Cooperman, has had a tough year. Year to date the company's share price has slumped 88% as it has failed to meet any of its key targets.
But yet, despite the company's endless stream of disappointing figures, analysts at BTIG still rate the company a 'buy'. In fact, until yesterday BTIG had a 12-month price target of 52p on Monitise's shares. Although, after yesterday's dismal trading update, analysts have now reduced their 12-month price target to 9p -- 221.4% above the current price, but still have a buy rating....
Monitise: Trading below cash
Mark Palmer and Giuliano Bologna are the analysts here, and their rather optimistic forecasts are based on the fact that Monitise is currently trading below the value of the cash on its balance sheet.
"Monitise (MONI LN) yesterday added to the string of disappointing earnings announcements it began last year, by announcing the departure of CEO Elizabeth Buse after just 15 months with the company, and had its share price sawed in half as a result. While a case could be made for simply writing off the stock after what has been a terrible call on our part, we believe that with MONI's market cap of £61.6mm exceeded by its reported net cash position of £88.2mm, the share price reflects an excessive degree of pessimism about the firm's prospects and value."
"As such, we are reiterating our Buy recommendation on MONI while reducing our price target to 9p (from 52p) based on 10X FY18E EBITDA of £21.89mm discounted back at 15%. We believe the shares represent an inexpensive option on the potential turnaround of a company that has begun to see the benefits of the strategy that Buse put in place, particularly with regard to reductions in operating expenses and capital expenditures that should facilitate the achievement of EBITDA profitability in 2H16" http://www.valuewalk.com/2015/09/monitise-plc-btig/