ASX All Ords stock EML Payments Ltd (ASX: EML) has exploded on the chart this past month, rocketing by almost 48%.
Investors piled into the payments company after it revealed its Q1 FY25 growth numbers at its annual general meeting (AGM) late last month.
Two fundies have posted their bullish views on EML in updates following November's rally, each noting the company's growth potential for 2025. Let's see.
ASX All Ords stock primed for growth
EML came in with strong performance this past month after revealing solid numbers for the first quarter of FY25.
The stock spiked from a close of 66.5 cents apiece on Friday 22 November, before closing at a high of $1.01 a week later. It has since retreated slightly to trade at 98 cents apiece at the time of writing.
This was to the delight of Forager Funds and Tamim Asset Management. Both firms hold the ASX All Ords stock and reported solid gains on their positions in November.
EML was the "biggest mover for the month" for the Forager Australian Shares Fund, which booked an 8.17% return on all its holdings, outpacing its benchmark by approximately 450 basis points.
As of 30 November, 5% of the fund's total net asset value (NAV) was held via its position in EML shares.
It says that "growing optimism for small-cap stocks" was a catalyst for the month's performance. But for EML, it was due to the business.
A strategy update alongside its AGM trading update assuaged market concerns and sent the share price up 58% for the month.
It is only back where it was in June and we think it has a long way to go.
Meanwhile, the team at Tamim, which has been bullish on EML for some while, said in a note released last week that the company is at a "pivotal juncture".
The asset manager said numerous factors make EML attractive, including its new strategy and growth targets.
On the core business, EML acknowledged they have a solid foundation with a presence in three of the world's largest and fastest growing payments markets – Europe, North America, and Australia.
They process over $23 billion in GDV and have $2.1 billion in stored value float, providing a strong revenue base.
The focus here will be on extracting more value from their existing 1,100 customer relationships through cross-selling and deepening partnerships
But Tamim also pegs the ASX All Ords stock as a takeover candidate, which could unlock further value for investors if it were to eventuate.
…with a $95 million EBITDA target in three years versus a current EV [enterprise value] of approximately $350 million, EML presents itself as a compelling takeover candidate.
A bid in the range of $500-600 million ($1.50 per share) seems highly plausible within the next six months, offering significant upside for shareholders.
Fundies not alone
These aren't the only two players with skin in the game who have highlighted their outlook for this ASX All Ords stock.
The team at WAM Microcap Ltd (ASX: WMI) recently attended an investor day held by EML, noting this correlated with the improved share price performance over the past month.
WAM said it is "positive" on EML in the medium term and sees potential for the company to beat its pre-tax earnings guidance for FY25.
EML would need to beat earnings before interest, tax, depreciation, and amortisation (EBITDA) of $54 million to $60 million to achieve this, based on its own projections.
Foolish takeout
This ASX All Ords stock performed well for fundies that owned it during November after a more-than 50% jump in the month. But each of these players reckons EML has plenty of legs to continue this marathon.
In the last 12 months, EML is up by around 18%.
