SeeThruEquity Issues Company Update Note on Calpian, Inc. (OTCQX: CLPI) Increasing Price Target to $2.76
NEW YORK, NY / ACCESSWIRE / May 28, 2015 / SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced that it has issued an update note on Calpian, Inc. (OTCQX: CLPI). In light of the progress at Money-On-Mobile and the success of the company’s new Domestic Remittance product (person to person), we are increasing our price target for Calpian to $2.76 per share.
The note is available here: CLPI Company Note. SeeThruEquity is an approved equity research contributor on Thomson First Call, Capital IQ, FactSet, and Zack's. The report will also be available on these platforms.
Calpian, Inc. ("Calpian") is a global mobile payments technology and processing company offering mobile payment services through Indian subsidiary Money-On-Mobile and domestic transaction services through Calpian Commerce. In our view, Calpian shares are woefully undervalued relative to the powerful growth opportunities for its Money-on-Mobile subsidiary. Money-On-Mobile is a rapidly growing emerging leader in the India mobile payments space that allows customers to use their mobile phones to pay for goods and services, or transfer funds from one person to another using simple text functionality. We see this as an area with robust growth potential given favorable demographics, market dynamics and the high rate of mobile phone penetration.
In our view, Calpian's Money-On-Mobile subsidiary has is a multi-year growth story with breakout potential that is only minimally reflected in Calpian shares.
Highlights from the note are as follows:
Robust growth continues at Money-On-Mobile
Calpian subsidiary Money-On-Mobile increased transaction processing volume by 14.1% month-over-month from March to April. Volume was Rs2.012 billion Indian Rupees, or $31.9mn US dollars. Money-On-Mobile grew its cumulative user base by 3.3mn unique users to surpass 135mn users at the end of April. A large reason for the accelerating growth of the Money-On-Mobile platform is due to the introduction of Domestic Remittance functionality (person-to-person transfers) in December 2014. The product has gained traction quickly, processing over $8mn US dollars in 138,000 transactions during April alone. The company also continued to expand its retail distribution network. As of April 30, the Money-On-Mobile service was available at 259,517 stores in India - an increase of 6,702 from March.
Strong FY3Q15 results driven by Money-on-Mobile
Calpian reported strong growth for the quarter ended December 31, 2014, with revenues of $63.4mn, a 7% sequential increase from the September quarter. Revenue was driven by a contribution of $57.7mn from the company's Money-On-Mobile subsidiary, which increased by 11% sequentially in constant-currency terms, or 8% after adjusting for currency translation to US dollars. We view the continued strong performance of this subsidiary as critical to the investment thesis for Calpian and will continue to track its unique users and volume processed closely.
Monetizing domestic assets to reduce debt and fund growth
Calpian's domestic business declined by 5% sequentially to $5.7mn due to asset sales during the prior quarter. The company continued to divest these assets after the quarter's end, using the proceeds to pay down senior debt and fund Money-On-Mobile. Calpian ended the quarter with cash on hand of $0.9mn and debt outstanding of $19.2mn, and immediately following the quarter completed the sale of a portion of its domestic assets, using the proceeds to reduce senior debt by $2.2mn to $6.6mn.
Increasing price target to $2.76
In light of the momentum at Money-On-Mobile and the successful launch of its person-to-person platform, we are increasing our price target for Calpian to $2.76. We find Calpian shares undervalued considering the size and opportunity of its Money-On-Money subsidiary. If achieved, our target of $2.76 suggests upside potential of 376.3% from the recent price of $0.58.
Please review important disclosures on our website at www.seethruequity.com.
About Calpian, Inc.
Calpian, Inc. (CLPI) is a global mobile payments technology and processing company offering mobile payment services through Indian subsidiary Money-On-Mobile and domestic transaction services through Calpian Commerce. Money-On-Mobile is a mobile payments service provider that enables Indian consumers to use their mobile phones to pay for goods and services, or transfer funds from one cell phone to another using simple SMS text functionality. Calpian Commerce provides the U.S. merchant community with an integrated suite of payment processing services and related software products. For more information, visit www.calpian.com.
SeeThruEquity is an equity research and corporate access firm focused on companies with less than $1 billion in market capitalization. The research is not paid for and is unbiased. We do not conduct any investment banking or commission based business. We are approved to contribute our research to Thomson One Analytics (First Call), Capital IQ, FactSet, Zacks and distribute our research to our database of opt-in investors. We also contribute our estimates to Thomson Estimates, the leading estimates platform on Wall Street.
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