Moneysupermarket.com Group PLC  

Moneysupermarket.com Group PLC (LON: MONY) is an FTSE 250 index listed Company. It operates a price comparison website-based business specializing in financial services.

Investment Rationale – SELL at GBX 208.00

• The Downturn in Revenue Growth: The company's group revenue was £316.7 million in FY21 (period ended on 31 December 2021) compared to £344.9 million in FY20, a reduction of 8.17%.
• Decrease in Profits: Due to higher operational costs and lower margins, the company's after-tax earnings fell by 24.81% to £52.1 million in FY21, compared to £69.3 million in FY20.
• Decline in Cash: It turned from net cash position in FY20 to net debt in FY21.
• Ukraine Tension: The mounting concern over the Russian invasion in Ukraine can continue to weigh on the equity market.
• Overvalued Multiples: From a forward 12-months basis, EV/Sales and Price to Book value valuation multiples are overvalued against the industry median of the technology sector.
• Technical Indicator: The stock price is approaching the Bollinger Band, while the 14-day RSI (~61.37) is close to an overbought zone from a technical viewpoint, signaling a short-term downturn.

Share Price Chart

 (Source: REFINITIV; Analysis done by Kalkine Group)

Valuation Methodology: Price/Earnings Approach (FY22) (Illustrative)

Conclusion                                                                    

Based on the decrease in revenue, lower profits, decline in cash position, subdued macroeconomic factors, , bearish technical indicators, coupled with the unfavourable valuation conducted above, we have given a "SELL" recommendation on Moneysupermarket.com Group PLC at the closing market price of GBX 208.00 (as of 23 February 2022). 

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors' appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

Note 3: Dividend Yield may vary as per the stock price movement.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

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