Berenberg raises target price on Boku

Berenberg said Boku's capital markets day on 22 February reaffirmed its mid-term investment case and answered several key investor questions, leading it to also reiterated its 'buy' rating on the stock.

Specifically, the analysts said Boku confirmed that its blended take rate will increase as it accelerates into local payment methods, its investment phase was ending and positive operational leverage will return, that it expects to double revenue in the mid-term, and that it was targeting a roughly 50% profit margin in the mid-term.

While Berenberg said it had "consistently extolled these aspects" of Boku’s investment case in recent times, it views management's commitment to mid-term financial targets as "confirmation" of its thesis.

"Considering investors have long awaited clarification as to the timing of Boku's investment phase and when positive operational leverage will return, we think that this announcement should be taken very positively by the market," said the German bank. "Boku is a must-own stock in the UK mid-cap TMT sector, in our view."

Reporting by Iain Gilbert at Sharecast.com