LSAK - Lesaka: An Undervalued Fintech Gem

2024-04-21 05:40:21 ET

Summary

• Lesaka has made significant progress in its turnaround efforts and is ready to accelerate growth.
• The company owns a 10% equity stake in Indian fintech company MobiKwik, valued at roughly $76 million (~30% of its current market cap).
• The macroeconomic forecast in South Africa is favorable, with improving conditions and a growing fintech market.
• Acquisition of Touchsides and favorable macroeconomic trends in South Africa boost Lesaka's growth prospects.
• Strong leadership and strategic acquisitions position Lesaka to capitalize on Africa's burgeoning fintech market.

Investment Thesis

Since we last covered Lesaka Technologies, Inc. ( LSAK ), the largest fintech company in South Africa, the company has made significant progress in its turnaround efforts, made another acquisition, upgraded management, and is now ready to accelerate growth. However, the stock price has not yet fully reflected these developments.

Outgoing CEO Chris Meyer has successfully turned the business around, and the reins are now being handed over to new Executive Chairman Ali Mazanderani, a successful emerging markets payments investor and entrepreneur. Now that the company is profitable in EBITDA and the balance sheet has been de-leveraged, Lesaka is ready to accelerate revenue growth and take advantage of the huge fintech opportunity in Africa.

Furthermore, LSAK has a significant near-term upside catalyst that will likely be realized by 2024. Specifically, LSAK owns a 10% equity stake in one of the largest fintech companies in India, MobiKwik , which recently filed to go public . LSAK's stake is roughly $76 million, or ~30% of Lesaka's current market capitalization....

For further details see: