Méliuz (CASH3) thwarts consensus and shares fall 9.80%;  Company says growth is 'just the beginning'

Méliuz (CASH3) thwarts consensus and shares fall 9.80%; Company says growth is ‘just the beginning’

Méliuz (CASH3) stock closed 8.80% lower this Tuesday (16) — that’s after the release, last night, of its balance sheet for the second quarter of 2022. Analysts generally identified the results as weak and modest, but the company, in a conference call, confirmed this Al-Sabah said that revenues “started to grow” and that the period was marked by exceptional spending.

“Mulius reported revenue of R$79 million, up 45% on the year and slowing significantly compared to the previous quarter,” Bradesco BBI analysts open about the company. “Revenue grew less than expected and profitability remained under pressure.”

Gross merchandise volume (GMV) totaled R$1.4 billion, up 24% from the year, but also slowing from the 66% growth recorded between January and March. Bills the shopIn turn, it was R$61.9 million, up 43% on the same basis, compared to 85% in the first quarter.

“The market saw the results as negative, with slowdown in revenue growth and difficulty in profitability pointing to a challenging scenario ahead. In this context, we see little room for stock reclassification, while the market may remain skeptical given the implementation risks ahead,” explained BBI, which has a recommendation Outperform (above market average performance) for Méliuz, with a target price of R$3.90.

UBS BB follows the same path – noting that revenue from the shop It was 7% below its forecast, with a drop in GMV taking the shine off as a result of services revenue, which grew 14% in the year and in line with consensus, and Picodi, 14% above the bank’s expectations.

The Swiss financial institution has a neutral valuation of the company and a target price of R$ 1.40.

XP Investimentos identified the results as mixed, with a more optimistic view of net revenue, but with increased spending on new product development. However, the brokerage firm maintained its buy recommendation, with a target of R$8 per share.

“The company continued to achieve strong growth in its operations, on the other hand, costs and expenses grew, resulting in a net loss of R$28.2 million, which is getting worse relative to expectations and on a year-over-year basis,” the analysts explained. brokerage.

Finally, Itaú BBA was more pessimistic, identifying the results as negative.

“Operating expenses increased to R$134 million, inflated by R$14 million expenses related to Bankley and R$19 million from unusual items. Ebitda (earnings before interest, tax, depreciation and amortization) was negative R$52 million, compared to R$17 million R$negative in the first quarter and against our negative estimate of R$14m,” bank analysts commented.

However, the Bank maintains a recommendation Outperform With a fair value of 3.3 Brazilian Real.

Milius says revenue is just starting to grow

In his meeting with investors and analysts, Melius sought to explain his numbers.

In terms of revenue, Davey Holland, director in charge of financial services for the company, said growth is “just getting started,” as the company is still developing a series of its new products, such as Bankly itself, credit offering, and Encryption as a Service.

On this front, executives also stated that a significant portion of the higher costs were, specifically, arising from these new initiatives.

According to Luciano Valli, chief financial officer of Melius, the quarter was significantly impacted by one-time expenses. Part of it comes from the result of mergers and acquisitions [fusões e aquisições] From bank, while recognizing certain expenses, another type is more related to the way we recognize our talents. In the quarter, we had an equity position in treasury, at purchase cost, and with a portion of it, we valued our employees. It was something exceptional. Removing these two effects, we have natural results.”

On this front, UBS notes that without M&A expenses of R$8.7 million and R$10.2 million in shares offered to employees, Millius would have recorded a net loss of R$15.2 million.

CEO Israel Salmin said that a tie It didn’t happen overnight.

“I set up the Operational Efficiency Committee, with all the editorials listing points for improving expenses and revenue as well. We listed 70 topics and made them a priority,” Salmin explained. done to improve our operating result. For now, we’ll do something similar. Our team has grown a lot and people have not received that education. We’re doing this again.”

Itaú BBA and UBS BB have a neutral recommendation for Méliuz common stock, with a target price of R$ 1.40.

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