Enova Snaps Up Pangea Universal Holdings

Enova International, a financial technology company, has agreed to buy Chicago-based Pangea Universal Holdings, a platform offering mobile international money transfer services. The financial terms of the deal were not disclosed. Shares declined 1.5% to close at $36.60 on March 19.

Enova (ENVA) CEO David Fisher said, “Enova will bring market-leading capabilities around high-volume transactions, marketing, mobile customer experience and, most importantly, machine learning and artificial intelligence.”

Pangea’s powerful, easy-to-use mobile application provides secure, fast, and affordably priced international money transfers from the US to 40 countries, with a focus on Latin America and Asia, the company said. An online checking account, which further reduces the cost and friction of money transfer, is also offered by Pangea. Notably, Pangea has transferred over $161 million in funds out of the US and recorded 66% growth in new customers in 2020. (See Enova stock analysis on TipRanks)

Last month, Enova reported 4Q results. The company’s 4Q adjusted earnings more than doubled on a year-over-year basis to $2.39 per share and outpaced Street estimates of $1.26. Revenues decreased 24% to $264 million but exceeded analysts’ expectations of $250.4 million.

On Feb. 8, JMP Securities analyst David Scharf raised the stock’s price target to $38 (3.8% upside potential) from $28 and maintained a Buy rating.

In a note to investors, Scharf said, “The company is one of the strongest secular investment opportunities in consumer finance, and its 15-year history as a pioneering online lender is entering a new phase with the acquisition of OnDeck Capital.”

“Enova stands to benefit from the acceleration toward more online financial services amid the pandemic,” the analyst added.

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 2 Buys versus 1 Hold. The average analyst price target of $38.50 implies 5.2% upside potential to current levels. Shares have increased 58.7% so far this year.

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