Why this broker sees more upside in the Raiz (ASX:RZI) share price

The fintech company has got the tick of approval from a leading broker.

| More on:
Three different hands against a blue backdrop signal thumbs up, indicating share price rise on the ASX market

Image source: Getty Images

The Raiz Invest Ltd (ASX: RZI) share price has had a stellar year so far.

But, according to one leading broker, shares in the micro-investing platform could go even higher.

Let’s have a look at the fintech company and what’s happening with its share price.

Broker paints positive outlook on Raiz share price

Shares in Raiz could receive a boost after a bullish note from renowned broker Taylor Collison.

Analysts slapped a ‘speculative buy’ rating on the company, highlighting the large market opportunity in the micro-investing landscape.

According to the broker, Raiz remains well-positioned to capitalise on the market opportunity, citing its positive cash flow and solid balance sheet.

The note highlighted several other factors that could propel the fintech’s growth.

In particular, analysts noted the company’s continued increase in active users and funds under management.

Raiz also has an expanding pipeline of growth products and innovations such as its superannuation and ESG offerings.

The company’s expansion into Southeast Asia was also lauded as an ideal hunting ground given the region’s high mobile phone usage, large aspirational populations and small-scale investors.

Analysts also waived the company’s recent boardroom conflict as an unwelcome distraction, citing no effect on Raiz’s business performance.

The note pointed to Raiz’s recent full-year report as an indicator of its growth potential.

How did Raiz perform in FY21?

The Raiz share price received a huge boost after releasing its full-year report for FY21.

The fintech reported impressive growth to 30 June 2021, highlighting a strong balance sheet with cash on hand of $19.4 million.

Other highlights from Raiz’s full-year report included;

  • 37% year on year (YOY) increase in group revenue of $13.4 million
  • global active customers up 87% YOY to 456,927
  • Australian funds under management (FUM) up 76% YOY to $799.6 million
  • superannuation FUM up 53% YOY to $106.6 million
  • micro investing platform segment revenue up 40% YOY to $11.4 million
  • revenue per customer (run rate) in Australia up 32% YOY

Throughout the financial year, Raiz noted implementing a number of features to increase customer engagement.

Snapshot of the Raiz share price

Raiz is an Australian financial technology (fintech) company that provides users with a mobile-focused micro-investing platform.

The company has a tiered revenue model consisting of maintenance fees, account fees, netting and advertising fees.

Since the start of the year, shares in Raiz have bolted more than 90%.

The Raiz share price closed Friday’s session at $1.80.

Should you invest $1,000 in Raiz right now?

Before you consider Raiz, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Raiz wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. 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 Broker Notes