Broker tips Plenti Group (ASX:PLT) share price to shoot higher

Plenti Group is destined for more growth, according to broker Shaw and Partners.

| More on:
a woman stares ahead with a serious expression on her face while half of her face is covered by computer coding, indicative of artificial intelligence and machine learning technology.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares in Plenti Group Limited (ASX: PLT) have had a great run lately, up 13% in the last 8 days. The Plenti Group share price was trading up 3.8% at $1.21 at yesterday's close.

Melbourne broker Shaw and Partners is bullish on the technology stock. We examine why below.

But first, a quick look at the company

Plenti is a technology-led consumer lending and investment company that has three revenue streams.

Firstly, it provides automotive lending for the hire or purchase of new vehicles. Secondly, it provides renewable energy lending for the purchase and installation of renewable energy products such as solar panels and batteries.

And finally, it also focuses on personal lending, providing fixed-term, unsecured, interest-bearing loans used for a wide variety of purposes.

Broker expects big things

Shaw and Partners is bullish on the Plenti Group share price, yesterday issuing a buy recommendation and a price target of $1.74.

"Plenti presents a compelling opportunity to invest in a fintech lender with a premium quality loan book," the broker said in its report to investors yesterday.

Shaw and Partners also pointed to favourable net interest margins (NIM) and high return on equity (ROE) metrics.  A NIM is the difference between the interest income earned and the interest paid by the financial institution.

Further, the broker points to Plenti Group's diversified loan book approaching $1.0bn. The business posted record quarterly loan originations in each lending vertical, across automotive, renewable energy and personal loans. Its total loan portfolio increased to $615 million, 61% above the prior corresponding period.

Despite the positive reports, Shaw and Partners did warn of risk in the report.

Specifically, it sees Plenti's Venus Platform as technologically superior to other offerings in the fintech market. However, as technology evolves, this may not always be the case. "These changes may lead to a requirement for Plenti to redevelop its lending platform in order to remain competitive," the broker said.

With the Plenti Group share price currently at $1.21 and a price target at $1.74, the broker is tipping plenty of room for more growth in the company.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Technology Shares

Woman and man calculating a dividend yield.
Technology Shares

Who sold $285 million worth of WiseTech shares last week?

Some big news hasn't stopped investors from pushing this tech stock higher today.

Read more »

Two smiling work colleagues discuss an investment or business plan at their office.
Technology Shares

2 ASX shares soaring higher with no signs of slowing

The share price accelerator is on, according to experts.

Read more »

A view of competitors in a running event, some wearing number bibs, line up together on a starting line looking ahead as if to start a race.
Share Market News

Here's how the ASX 200 market sectors stacked up last week

ASX tech shares led the market with a 3.16% increase.

Read more »

The letters ETF sit in orange on top of a chart with a magnifying glass held over the top of it
Technology Shares

What happened to Betashares Nasdaq 100 ETF (NDQ) in November?

One big factor led to a 7.35% run for this popular US tech-heavy exchange-traded fund during the month.

Read more »

Man with rocket wings which have flames coming out of them.
Technology Shares

Up 180% in a year! Why this explosive ASX tech stock can keep rising

Analysts at Bell Potter think this high-flying stock can keep going higher.

Read more »

Businessman taking off in rocket-fuelled office chair
ETFs

Betashares Nasdaq 100 ETF (NDQ) is up 30% in a year. Which stocks have turbocharged its rise?

Of course, Nvidia is one of them... but not all of them are tech stocks!

Read more »

A man looking at his laptop and thinking.
Technology Shares

Why this superstar ASX 200 tech stock is sliding today

What could it be?

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Technology Shares

Why is the Droneshield share price racing higher on Thursday?

This counterdrone technology company is back on form and racing higher. But why?

Read more »