Canaccord Genuity lowers target price on Boku

(Sharecast News) - Analysts at Canaccord Genuity initiated coverage on mobile payments firm Boku with a 'buy' rating and 271.0p target price on Monday, stating the group was "owning the rails in a wallet-first world". Canaccord Genuity said Boku has achieved "the rarest of occurrences", having out-executed larger competitors and out-positioned incumbent card processors in the global pivot to local payment methods.

By 2028, roughly 60% of cross-border e-commerce was expected to transact via LPMs such as e-wallets and real-time payments, with Boku sitting "at the heart of this shift", offering global merchants such as Amazon and Google access to an increasingly fragmented patchwork of domestic payment schemes.

"Revenue momentum is building with other LPM revenue increasing from $1.6m in H122 to $14.1m in H124. Management has guided to 20%+ compound revenue growth over the medium term," said Canaccord Genuity, which added that Boku was "a direct beneficiary of the structural shift in global payments" from cash and cards towards mobile-centric, digital payments.

The Canadian bank said "Boku's big idea" was to leverage a decade of integration and commercial relationships from direct carrier billing and redeploy to other LPMs, noting that it has now built a global platform of more than 250 LPMs and over 100 merchants, underpinned by infrastructure and regulatory scale across 74 markets.

"Boku has strong structural drivers, a defensible moat, impressive profitability (FY24: 31.6% adj EBITDA margin), and appears primed to benefit from operating leverage as volumes scale," added Canaccord.

Reporting by Iain Gilbert at Sharecast.com