Mogo Finance (TSX:MOGO)(NASDAQ:MOGO) is a Vancouver-based fintech company. Shares rose 1.24% on May 3. The stock has climbed 54% in 2019 so far.
Mogo stock surged in April after the company announced a merger with Difference Capital Financial. When the transaction is completed, estimated to be in the second quarter of 2019, Mogo shareholders will own approximately 80% of the combined company which will be named Mogo Inc.
Mogo will gain access to $9 million to $10 million in cash as a result of the deal. It will also gain control of Difference’s portfolio of investments. The merger strengthens Mogo’s balance sheet and gives the company access to a portfolio worth approximately $24 million.
The company is set to release its first-quarter results for fiscal 2019 after markets close on May 14. In 2018, Mogo saw revenue increase 26% to $61.3 million. Subscription and services revenue rose 106% year-over-year and represented 50% of core revenue for the full year. Adjusted EBITDA posted 68% growth, increasing to a record $4.2 million.
Mogo stock looks very pricey ahead of its next earnings release. Shares had an RSI of 73 as of close on May 3. This puts Mogo stock in technically overbought territory. The stock is trading at the high end of its 52-week range. North American stock markets are broadly overvalued in early May, and investors should start thinking about taking profits as U.S.-China trade concerns return to the forefront.
