Are you a fan of point-of-sale fintech up-and-comer Square (NYSE:SQ) and its famous Cash App? And are you willing to broaden your geographic horizons as an investor? If you answered “yes” to both of these questions, then you should take a look at Mogo (NASDAQ:MOGO) and seriously consider buying Mogo stock.
Just as Square’s Cash App is a big hit in the United States, the Mogo App and the newly introduced MogoSpend are gaining traction in Canada. Indeed, investors could view Mogo stock as being today where Square stock was several years ago.
Square stock is substantially higher than it was a few years ago, but will Mogo stock perform similarly? That, regrettably, cannot be guaranteed.
At the very least, however, we can explore what Mogo, along with the Mogo App and MogoSpend, have to offer as this emerging fintech player may be poised to take American investors by surprise.
A Closer Look at Mogo Stock
One thing that traders need to realize is that Mogo’s journey hasn’t been a smooth one. Its share price spiked briefly above $6 in late 2017, only to crash back down below $3 in a matter of months.
Then there was a long period in the doldrums. From March of 2018 to February of this year. Mogo stock was stuck in a range between $2 and $4. Its prior peak of $6 was tantalizing at times, yet frustrating and unreachable time and again.
As if all of that wasn’t bad enough, the onset of the novel coronavirus caused Mogo stock to plummet to a mere 80 cents in February and March. But some solid fiscal data seems to have precipitated a share-price recovery in July.
Today Mogo is slightly below the crucial $2 level. No, it’s just a question of whether the bulls can push it back above $2 and, better yet, maintain enough optimism to reclaim $4 and eventually $6.
Mogo Won’t Lose Its Mojo
The encouraging financial data that I just alluded to came in the form of Mogo’s preliminary results for this year’s second quarter. Borrowing some of InvestorPlace contributor William White’s due diligence, we can see multiple, positive aspects of Mogo’s expected fiscal data:
- Revenue in the range of $10.3 million to $10.5 million
- EBITDA, excluding certain items, between $4.5 million and $5 million
- Operating cash flow net of investing activities totaling $6.5 million to $7 million (its prior guidance had been between $5 million and $6 million)
Be advised that these are only preliminary results, and its final results are scheduled to be released on Aug. 11. Nevertheless, the owners of Mogo stock should be encouraged by what’s been presented so far.
We can certainly conclude that Mogo’s shareholders were duly impressed with the preliminary quarterly data, as its stock price rallied 51% on the day that the numbers were released.
Mogo’s Innovations
In other words, the bulls are back in town. Perhaps they were just waiting for a catalyst, and that catalyst might be the recently released MogoSpend add-on to the Mogo App.
MogoSpend comes with a card, but we can expect modern shoppers to simply use its digital app. But what is MogoSpend all about? Mogo founder and CEO David Feller offers a succinct explanation:
“[The global pandemic] has created an urgent need for a more sustainable way to manage our finances – one that takes into account our financial health, the planet’s health and the health of our society… Our goals in creating MogoSpend were to create a new way for Canadians to manage their spending that helps to address these problems…”
To help achieve this ambitious objective, MogoSpend offers zero interest and no monthly fees. Plus, it could help Canada achieve carbon neutrality. That’s because one pound of carbon dioxide will be offset for each dollar that’s spent through MogoSpend.
Adventurous investors can take inspiration from Feller’s forward-thinking vision of the future of digital payments. His company is changing the fintech ecosystem, empowering shoppers to think and spend differently.
The Bottom Line
Admittedly, Mogo stock is a bit of a YOLO (you only live once) trade. After all, the jury’s still out on whether MogoSpend will gain traction.
Still, the preliminary quarterly fiscal data is positive. And the company’s founder has a vision that could benefit shoppers and the environment.
So, will Mogo ever be as large and successful as Square? That’s uncertain, but its share price is rebounding nicely. Perhaps more traders should open their minds to new geographies and new types of payments niches with Mogo stock.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.
