Side (LSE:BOKU), z FTSE AIM 100 Indexhe’s had a terrible time lately. The company’s shares are down 53% year to date, with 33% of that decline coming just last month.
As I write this, the price has dropped to 99p per share.
The latest landslide was caused by the July 8 price update. In this case, the mobile payments company was targeting lower full-year revenues and profits (never a good combination).
Despite this, Canaccord Genuity immediately came out and gave Boku a modern price target of 263p. While this was below the previous 324p projection, it still holds true 165% above the current share price.
Berenberg Bank then stepped in with a price target of 200p. Again, this would mean doubling from this point. So is Boku stock worth watching at 99p?
What is Boku?
For the uninitiated: Boku, which has a capital of £292 million, helps unbanked people around the world pay for goods and services by phone. This may be due to your mobile bill (direct billing with the operator) or preferred local payment methods (LPM).
Boku Bread & Butter’s business helps Western brands such as Netflix, SpotifyGoogle, Metaand Fortnite seamlessly enroll paying customers in Southeast Asia, Africa and Latin America.
Revenues more than doubled from 2022 to 2025, from $63.8 million to $129 million. As of 2021, the company remains profitable.
What went wrong?
When I last highlighted this issue in June, I warned that risks to growth include “fierce competition for local payments and potential adverse regulatory changes in their markets. Plus, losing a substantial retailer like Spotify would be a stab in the back“.
This is essentially what happened, as revealed in the company’s stock update for the six months ending June 30:
- Competition: unknownkey seller” are Thai customers using dual financing, which affects Boku payment volumes.
- Regulatory risk: local authorities suspended two direct connections as part of settlements with the operator in one market.
- Delays in launching several modern connections.
Due to these unfavorable factors, Boku lowered full-year revenue guidance to $135-142 million and adjusted EBITDA to approximately $38-42 million. Previously, the market expected USD 155 million and USD 49.9 million, respectively.
So why are analysts still bullish?
Of course, slowing growth increases the risk here, as do any more unfavorable regulations in local markets. But it’s not all doom and gloom. In the first half, total payment volume increased 12% to approximately $8.3 billion, which resulted in revenue growth of 11% to $66.5 million.
Boku also completed its first trades on PIX in Brazil and UPI in India. These are national instant payment systems. In addition, the dual sourcing seller will soon sell to several modern markets, which is expected to more than compensate for the lost sales volume in Thailand.
Most importantly, the company signed an “agreementlandmark“Partnership with fintech giant Stripe. Now thousands of existing global Stripe sellers can connect to over 300 LPM Boku, with two already gone live and started the transaction.
Where next? Well, it’s always worth taking analyst price targets with a pinch of salt. After all, they were predicting 300p and more for Boku in the not too distant future, but here we are at 99p.
That said, tech stocks look very economical compared to peers right now, which makes this a dip-buy opportunity worth exploring further.
Note: CEO Stuart Neal immediately bought £100,000 worth of shares when the company collapsed on July 8. The CFO then went to work and spent £64,000.
Should you invest £5,000 in Boku now?
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Mark believes there are 6 standout stocks that investors should consider buying right now. Want to see if Boku made the list?
Ben McPoland has no position in any of the companies mentioned.
