Liberum starts Bango coverage with 'buy' rating

Liberum started coverage of Bango with a 'buy' rating, arguing the company was positioned to gain from more spending on digital content.

Bango's key products are online payments and data monetisation, both of which will benefit from increased spending on digital content and merchants advertising to increase their share of this spending, Liberum said. Liberum initiated coverage with a target price of 260p with the shares standing at 181p at publication time.

Liberum, a corporate broker for Bango, predicted Bango's earnings before interest, tax, depreciation and amortisation would rise by 13 times between 2019 and 2022. Earnings per share are forecast to grow at a compound annual rate of 38% from 2020 to 2022, it added.

Bango supports about 6m subscriptions for streaming content such as Amazon and Netflix, giving it recurring revenue and increased visibility, Liberum said.

Customer numbers increased by about 10 times in 2020 and sales are expected to more than triple in 2021, Liberum said. Bango's next phase of growth will be based on a highly efficient new product for online advertisers that monetises payments data and fast growth in recurring media and gaming subscriptions, Liberum said.

"The value of online payments Bango processes has been doubling every year," Liberum analyst Janardan Menon wrote in a note to clients. "Data monetisation revenues are surging and are expected to be the biggest driver of future growth. After 70% revenue growth and c.800% EBITDA growth in 2020, we expect continued strong growth in future years."

Bango shares rose 3% to 186p at 11:58 GMT.