~~MoneyLion prides itself to be known as a leader in fintech, providing best in class personal finance and curated content on topics such as finance, through its very own super app.~~ With a strong user base of 15 million + customers, MoneyLion is on a mission to giving everyone the power to make their best financial decisions. The numbers so far are looking promising and from an investor’s standpoint are very attractive for attractive returns. Can it also prove to be a good return on investment? That’s a million-dollar question. We will hopefully try to answer this question by closely studying the company and its financial performance of Q1 2024.

While analyzing some topline figures from the most recent Q1’24 results, MoneyLion’s stock can be seen treading a path of an upward growth trajectory, exhibiting steady performance as compared to the other players operating in the fintech space over the past fiscal year. MoneyLion has also been upgraded by Needham on growth outlook, projecting a 35% upside for its shares, based on a 7.5x EV/EBITDA multiple of the firm’s fiscal year 2025 estimate. Revenue has also recorded a healthy growth of US$121 million, which is up by 73% YoY, way above analysts’ expectations, who had projected the figure to reach around US$ 110 million. $23 million was recorded as adjusted EBIDTA while the fintech company posted a net income of $7 million with $0.60 diluted earnings per share.



MoneyLion’s “marketplace-first” strategy is a point to look at for the investors as projected revenue for FY 2024 is slated to be in the range of US$ 525-535 million, which is between 55 to 58 percent growth YoY.

Keeping in view the promising numbers MoneyLion is showcasing through its performance, this scrip is very interesting to look at. The Company has posted a promising 73% increase in YoY revenue, has a large customer base of 15 million + users and is also on its track towards profitability. We will further deep dive and look at MoneyLion’s business strategy, revenue performance, how it is performing in the market as compared to its peer fintechs and what are the risks involved if any. This analysis will further provide us with insights backed by data to show how this stock can prove to be a good investment for the medium and long-term.

### **Market Opportunity**

MoneyLion operates in the fintech sector, specifically in the personal finance management segment. Major players that operate in this space alongside MoneyLion include Cleo, Mission Lane, Best Egg, Nerd Wallet, Lending Tree, amongst others.

Personal financial management is a path towards managing ones own finances to save and invest for the future. The market opportunity is a whopping US$ 435 billion comprising enterprise and consumer segments, showcasing a great opportunity to capitalize in this particular space by companies such as MoneyLion.


How MoneyLion differentiates itself from competition is its claim to be a super app that offers the most fully featured personal financial management tools across the industry.

| | MoneyLion | Cleo | Mission Lane | Best Egg | Nerd Wallet | Lending Tree |
| — | — | — | — | — | — | — |
| User Growth | | | | | | |
| MarketPlace | | | | | | |
| Mobile App | | | | | | |

The reader should be clear what is the competitive strength of Moneylion


For User Growth, MoneyLion leads with 115% year-over-year growth to 14.0 million users, followed by Nerd Wallet with 24 million active users (up 22% YoY). Lending Tree has 23.9 million users with 4.9% YoY growth. Cleo reports a 25% increase compared to the previous year, while Best Egg and Mission Lane have 2.9 million and 3 million+ customers respectively.

In terms of Marketplace offerings, each company has a unique focus. MoneyLion provides personalized products and a super app with embedded finance. Cleo focuses on AI-driven budgeting and savings tools. Best Egg offers low-interest personal loans and financial advice. Mission Lane targets individuals seeking accessible financial products and credit-building tools. Nerd Wallet provides a personal finance app with credit score information and transaction importing capabilities. Lending Tree differentiates itself by offering multiple loan offers from various lenders.

All six fintechs have mobile apps available on both the Apple App Store and Google Play, having a strong focus on mobile accessibility across the industry.

### **Strategy**

To provide best in class digital financial tools to millions of customers, the main aim of MoneyLion is to become the “ultimate financial marketplace” through becoming a one stop shop for personal financial tools that customers can readily access through an ecosystem that is interconnected with the organization’s 1,100 plus partners. They also boast about their “marketplace-first” approach, through utilizing data analytics.

Market differentiation:

MoneyLion distinguishes itself in the fintech landscape by building a personalized mass market offering that leverages a powerful combination of content, products, marketplace, and data. This approach positions the fintech to capitalize on emerging revenue opportunities while maintaining strong unit economics driven by their effective flywheel model.

MoneyLion’s platform is designed for profitable growth at scale, boasting an attractive long-term margin profile and sufficient headway to support the business through its journey to profitability. By focusing on these core competencies, MoneyLion has positioned itself uniquely in the market to provide personalized financial solutions to a broad audience, addressing the diverse needs of mass market consumers in a way that sets it apart from traditional financial institutions and other fintech competitors.


MoneyLion is also investing in technologies that is opening up another vertical for the company by utilizing open APIs and Software as a Service (SaaS) based offerings. Moneylion has already doubled the size of its tech teams signaling its determination to develop cutting edge products and services for its 15 million plus user base.

Answer this question: Why is Moneylion growing their customers faster than others?

Below is the answer to the question; have also added a chart to showcase rapid growth from web sources.

MoneyLion’s rapid customer growth can be attributed to its strategic pivot from expensive mass marketing to a more efficient, data-driven approach. The Fintech has built a rich content ecosystem that engages users across multiple touchpoints, encourages referrals through incentives, and focuses on a closed ecosystem approach.

Additionally, MoneyLion’s dual-pronged strategy combining consumer finance with enterprise embedded finance through its Engine platform has expanded its reach. With over 1,100 partners, MoneyLion has created multiple revenue streams and growth opportunities.


**Revenue**

MoneyLion has shown an increase in its revenue by 73% YoY clocking in at US$121 million. The strong growth is consistent with robust subscription net adds and in uptick in platformization business.

Projected annual revenue growth has been locked at US$2 billion which will include around 100 million subscriptions along with growth in platform business. MoneyLion also relies heavily on its go-to-market strategy, relying on its expansive partner network for customer leads for individual and business accounts.

Growth bracket has been set between US$128 – 132 million for Q2’24, a projected 60% increase in YoY growth. Whereas the organization in targeting up to US$525 million or up to 58% YoY growth for 2024 revenue.



### **Operational Metrics**

Analyzing the cashflows from Q1’24 results, MoneyLion has a positive cash flow with US$37million during the first quarter. While gross margins have increased by up to 2% YoY, an overall increase by 73% has been witnessed in the first quarter.

MoneyLion’s shift to a data-driven customer acquisition strategy has made it possible for the Fintech to achieve profitability and reduce costs and pursue operational excellence. The company’s efficient business model mechanism is reflected in the financials with Adjusted EBITDA improving from a $19 million loss in Q2 2022 to a projected $23 million gain in Q1 2024. The margin has expanded impressively from -21.2% to an anticipated 19.4% over the same period, representing a 480 basis point improvement quarter-over-quarter.

MoneyLion’s dual-pronged approach, combining consumer finance with enterprise embedded finance, has fueled its growth to 12.1 million customers by Q3 2023, a 23% quarter-on-quarter increase. With a strengthened cash position of $93 million and a targeted $0.60 diluted EPS for Q1 2024, MoneyLion has not only achieved profitability, that in itself is a significant milestone, but is poised for continued growth, demonstrating the success of its strategic pivots in a challenging fintech landscape.


**Valuation**

The trading pattern also overall looks promising as MoneyLion is currently trading at around eighteen times on the next 12 months revenue based on 2024 midpoint revenue projections. This metric has a strong point to make as it is demonstrating an upward growth trajectory and a promising opportunity to capitalize on the chances present in the market for growth.

If we analyze the metrics given in the charts below, we can see that MoneyLion, this time compared with peers, Lending Tree, SoFi, Nerd Wallet and Upstart, generally appears to have a lower valuation. The P/E Non-GAAP ratios for both FY1 (13.38) and FY2 (8.32) suggest the same. However, if we look at the P/E GAAP (FWD) of 47.11, this ratio makes it more attractive than most peers. In terms of Price/Sales, MoneyLion sits somewhere in the mid-range. Furthermore, the fintech’s Price to Book ratio of 2.95 and Price/Cash Flow of 5.48 are also competitive.

Based on revenue growth metrics, MoneyLion showcases solid performance as compared to its peers. The fintech outperforms Lending Tree as well as Upstart but lags behind SoFi in terms of YoY revenue growth. In terms of forward revenue growth, with 24.48%, MoneyLion outperforms all. Again, on the CAGR front, MoneyLion clearly has the highest percentage at 67.60%. These statistics show consistent performance and a robust financial footing for MoneyLion overall.



**Risks**

With promising numbers in Q1’24, there also lie some underlying risks. One of the key risks being stiff competition from already established players as well as from new market entrants who are willing to put their stake to get a share of the market. Moreover, regulatory risks are also a reality keeping in view the changes they can bring about in the fintech sector. Lastly, tight economic considerations can also have a direct impact on market demand.

Having said that, so far, the analysis gives a positive overview in the light of the above-mentioned risks, as MoneyLion’s strategy and its business model has the ability to navigate such risks and still come out as an overall winner, if things do take a turn and risks amplify.

**Conclusion**

MoneyLion’s unique marketplace-first strategy has clearly shown the signs that it is somewhat of a disruptor in the space that it is currently operating in at the moment. What really makes MoneyLion stands apart from its peers is its network of 1,100 plus partners that gives it an edge to quickly deliver product offerings in the space within a short time span and get an early mover advantage over others.

MoneyLion also has an advantage over its peer group stemming from its data-driven personalization strategy that helps in providing personalized products and services for customers. Furthermore, MoneyLion’s recent profitability is a significant milestone that shows a robust growth trajectory that would bear a lot of fruit. Finally MoneyLion’s lower valuation, as discussed in the earlier section signals towards a more stronger competitive positioning as compared to other players operating in this particular space.

While all the numbers are pointing towards a possibility of a win-win situation for the investors, the risk and reward benefits are leaning more towards an attractive valuation, keeping in view the valuation, as well as revenue growth and business model expansion metrics.