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Why Triterras Stock Soared Today

By Evan Niu, CFA – Dec 23, 2020 at 3:32PM

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Oppenheimer reiterated a bullish rating on the fintech specialist.

What happened

Shares of Triterras (TRIT -20.00%) have soared today, up by 16% as of 3 p.m. EST, after the company received a vote of confidence from Wall Street. Oppenheimer reiterated an outperform (equivalent to buy) rating alongside a $23 price target.

So what

Triterras has been under heavy pressure after disclosing last week that a prominent customer, which was also founded by Triterras founder Srinivas Koneru, could be forced into bankruptcy by a creditor. The stock recovered earlier this week after the company announced that Koneru intends to take advantage of the volatility and buy shares in the open market. Oppenheimer had initiated coverage on Tritteras with an outperform rating just a couple days before all of the drama.

Green stock chart going up

Image source: Getty Images.

In a conference call to provide updates to investors yesterday, the fintech company reiterated its guidance for the current fiscal year, which calls for revenue of approximately $56.6 million and net income of around $32.9 million. Triterras also said that fiscal third-quarter revenue is expected to be roughly $17 million and net income should be $10 million.

Now what

"Overall, results and momentum appear strong, and the full-year guidance implies a 235% and 142% YoY growth in revenue and net income off a low base," Oppenheimer analyst Owen Lau wrote in a research note to investors. "More importantly, while the company is growing faster than other high growth marketplaces, the stock trades at a discount to low growth marketplaces on average."

Lau believes that Triterras offers an attractive risk/reward profile for long-term investors, thanks to strong profitability and a massive total addressable market.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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