Northland has upgraded shares of BM Technologies (NYSE: BMTX) from Market Perform to Outperform, setting a price target of $5.40. The firm sees a dual pathway to potential gains for the company's shares.
The first is the pursuit of strategic alternatives, as mentioned in the recent earnings call. The company has received expressions of interest that value is significantly higher than its current stock price, according to the CEO.
The board of directors is also advocating for the exploration of all strategic options available.
The second factor contributing to the positive outlook is the anticipated growth in adjusted EBITDA. BM Technologies is expected to see an increase in its adjusted EBITDA to approximately $10 million by 2025. The projection is underpinned by the company's focus on its Higher Education business and the decision to exit its partnership with T-Mobile.
Northland's analysis suggests that if BM Technologies achieves the 2025 adjusted EBITDA target, the shares could be valued at $5.40 each based on a 5x multiple. If a 6x multiple is applied, the per-share value could rise to $6.25.
InvestingPro Insights
With Northland's recent upgrade of BM Technologies (NYSE:BMTX) to Outperform and a price target of $5.40, investors may find additional context in the latest data and insights from InvestingPro. The company's market capitalization currently stands at $41.99 million, reflecting the market's assessment of its value. Despite analysts not expecting profitability this year, the company has shown a significant return over the last week, with a 25.27% total price return, which could indicate investor optimism following the upgrade announcement.
InvestingPro Tips highlight that BM Technologies has experienced a strong return over the last month and a substantial price uptick over the last six months, with a six-month total price return of 101.16%. This aligns with the firm's strategic initiatives and could be a factor in the positive outlook. However, the stock is known to trade with high price volatility, a point for investors to consider in the context of their individual risk tolerance. It's also worth noting that the company does not pay dividends, which may influence investment decisions for income-focused shareholders.
For those seeking a deeper dive into BM Technologies' financial health and future prospects, InvestingPro offers additional tips to inform investment strategies. Visit InvestingPro for BM Technologies to explore the full suite of insights available.
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