MoneyMe’s trading update fails to impress

After reporting what the market regarded as an excellent full year result, emerging fintech lender MoneyMe’s (ASX: MME) latest trading update is filled with lots of positive news. 

To the uninitiated, MoneyMe is a cross between modern technology and old-school banking. MoneyMe originates through a diversified mix of credit products and distribution channels to create significant scale and long-term customer advantages.

The company got off to a roaring start to FY22 with revelations it has exceeded $1bn in originations.

Within the company’s latest trading update to November 30, MoneyMe reported record originations of $170m for the first two months into the second quarter FY22, up 286% on the previous period.

The company’s relatively new Autopay product – a secured loan with approval in under an hour – passed the $100m milestone in originations since its launch in April this year.

Contracted future revenue increased to $158m and the company expects first half FY22 revenue to exceed $46m.

Trading update

Managing director and CEO Clayton Howes believes the latest trading update signals that the company’s product, brand, and service experience is paying off.

“The November FY22 year-to-date results highlights Autopay is gaining significant traction, with dealerships and brokers signing up to the new platform and a faster than expected take-up from car purchasers.”

Earlier this year MoneyMe joined forces with EasyCars, a provider of dealer management systems to 900 car dealerships.

By integrating the company’s Autopay product into these dealers’ customer relationship management software, MoneyMe aims to streamline the lending process, and make it easier for salespeople to arrange auto financing for buyers.

Interestingly, today’s trading update has failed to capture market’s imagination, with the stock down 4.27% at time of writing. 

Investors should note, the small-cap’s (market cap $341m) stock is illiquid, with the top 20 shareholders owning 91.38% of shares on issue.

Consensus recommendation is Strong Buy.