There’s a small-cap ASX share that’s more than doubled in the past year, but a couple of fund managers reckon there’s more upside yet.
Non-bank money lender Wisr Ltd (ASX: WZR) was trading at 15 cents 12 months ago, but after market close on Monday it had spiked up to 32 cents.
According to Shaw and Partners portfolio manager James Gerrish, the company has an “exciting” 1 to 3 years ahead of it.
“You take a bunch of loans and create a security out of them. And you sell those loans on a set yield,” he said in his Direct From The Desk podcast.
“We hold Wisr in the Market Matters Emerging Companies portfolio. We’re bullish on that stock.”
Millennials + gen Z = a huge market
Shaw and Partners senior analyst Danny Younis reckons non-bank lenders have a big advantage with younger consumers.
“Millennials and generation Z are less likely to use cash these days. They’re less likely to use credit cards these days,” he said in the podcast.
“And they’re very distrustful of the big four banks.”
This factor gives Wizr a massive total addressable market (TAM) lending just in this country.
“The market is huge. Right now the TAM is $100 billion in Australia,” said Younis.
“And a big chunk of that is credit cards… Credit card debt in Australia is running at about $40 billion. That is a huge issue.”
Wisr shares have 70% upside
Despite the stock doubling in the past year, Shaw and Partners have a 55 cent price target for Wisr. This is another 70% up from the current level.
“The key over the next 12 to 18 months is a couple of things. One, you need to get customer numbers up — go from 400,000 up to a million,” said Younis.
“The second is to keep your bad debts low. So you want to continually have a prime book. You don’t want to be a subprime lender.”
Younis and Gerrish were complimentary about the people in charge at Wisr.
“The management team is very, very strong… They’re really focused on customer analytics and data analytics, and utilising technology to really drive that adoption rate,” said Younis.
“When they had their investor day 3 or 4 months ago and we finally got to meet them, it really proved to me this company is thinking ahead of the curve.”
Younis added the chief executive Anthony Nantes formerly worked for small business lender Prospa Group Ltd (ASX: PGL).
“A really great background in this whole lending space… and he’s got a large chunk of shares.”
Wisr currently sits at a market capitalisation of $345 million. Adcock Private Equity Pty Ltd is the biggest shareholder with a 15.8% stake.