If you’re looking for one investment vehicle to tap into this year, then H.C. Wainwright’s Kevin Dede thinks Voyager Digital (VOYG.TO) should be at the top of the list.
The analyst calls the cryptocurrency platform his “favorite stock pick this year,” doubling down on his positive thesis for the company following Voyager’s excellent December 2021 quarter (F2Q22) results.
If you want to get an idea of how fast Voyager is growing, a look at the top-line figure compared to a year ago will suffice. Revenue for the quarter hit $164.8 million, a 4400% increase on the $3.5 million reported for the same period in 2020.
The bottom-line also improved, with adj. EPS of $0.01 coming in above the -$0.07 delivered in F2Q21, while also beating the consensus estimate of -$0.03.
Total verified users climbed over 3.2 million, compared to the 2.15 million notched in FQ1, while funded accounts crossed the 1,074,000 mark, up from 860,000 in the previous quarter.
With the share price down 38% since the turn of the year and on the backfoot for the past 12 months, Dede thinks the company is suffering due to a misconception of the opportunity at play here.
“It appears investors are lumping Voyager into a ‘trading-driven’ bucket—perhaps warranted given the company’s origins—while failing to recognize the power of its rapidly evolving platform,” the analyst opined.
Voyager’s trading operations accounted for 52% of the overall revenue, falling from the September (F1Q22) quarter’s 53% and from 58% in F2Q21 with “multiple contributors” forming the other half.
Via its merchant service business, the company has added approximately $16 million in quarterly run-rate revenue, while on the earnings call the company said it through its lending and staking program it expects to deliver quarterly revenue of $40 million.
Additionally, although no specific dates were provided, the company is readying to launch the platform in Europe, most probably sometime this calendar year, while a Canada launch is also in the cards.
As such, Dede thinks there’s a big disconnect going on here. “On the strong results posted and commentary signaling a pick-up in trading activity thus far this quarter, we continue to see Voyager’s multi-dimensional business neglected at the current share price, especially as viewed against valuations accorded other crypto businesses that overlap Voyager’s staking and lending activities,” Dede explained. “We imagine the valuation deficit erodes on better understanding that comes with consistently reported results.”
Accordingly, Dede rates Voyager Digital shares a Buy rating and backs it up with a C$28 price target, suggesting shares will climb by a hefty 183% over the next 12 months. (To watch Dede’s track record, click here)
Three other analysts have thrown the hat in with Voyager reviews recently and they are just as bullish, providing the stock with a Strong Buy consensus rating. The C$27.44 average target is only just below Dede’s objective and set to generate one-year returns of ~179%. (See Voyager Digital stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
