- Boku, Inc (DI) Reg S Cat 3/144A
- 01 September 2025 13:01:53
Source: Sharecast
Berenberg, which has a 'buy' rating on the stock, noted that Boku has two distinct businesses - its established, lower-growth direct carrier billing business, which makes up roughly 65% of total revenues and has the dominant share of a stable market, and its digital wallet and account-to-account offerings, which were more nascent, higher-growth and operate in large, but increasingly competitive, markets.
The German bank said that with Boku's equity story primarily centred around its digital wallet and A2A offerings, it had chosen to assess the company's ability to compete with significantly larger competitors, concluding that Boku has a "sufficiently differentiated offering" to do so, through its core focus on LPMs, highly customised offering and advanced cross-border capabilities.
"In our view, Boku distinguishes itself from its peers by offering a more tailored, higher-quality offering, with respect to both its technology and its customer service levels. The company is disproportionately focused on the largest global merchants, while peers typically have a more 'mass-market' focus. This has helped drive high-quality, highly customised technology that maximises the conversion rates for its merchant customers. The quality of Boku's technical proposition is reinforced by its high-touch customer service, through which it optimises payment processes, acts as a trusted advisor and monitors potential issues – ultimately providing a flexible and reliable service that its merchant customers are willing to pay a premium for," said Berenberg.
The analysts expect Boku to achieve a FY24-27 revenue compoound annual growth rate of roughly 23% and a 150-200 basis point annual increase in its adjusted underlying earnings margin from FY26. Within this context, Berenberg reckons a 4.8x FY26 enterprise value to sales ratio and a 28.5x FY26 enterprise value/reported underlying earnings ratio represent "highly attractive" value.
Reporting by Iain Gilbert at Sharecast.com