MoneyGram International Inc confirmed a payment service partnership with Sigue Corporation. The partnership paves the way for Sigue’s to expand its footprint by leveraging MoneyGram’s API-driven platform.
Sigue’s US customers will be able to use MoneyGram (MGI)’s domestic and international receive network. In return, MoneyGram should experience a spike in payment volumes through its network and will be able to process additional transactions.
Additionally, the company should create meaningful processing revenue from increased transactions on its network.
Commenting on the partnership, MoneyGram CEO Alex Holmes stated, “As other companies plug into our platform, we have the opportunity to create meaningful processing revenue in the years ahead, and I’m excited about the momentum in the market leading to a strong partnership pipeline.”
After more than doubling in value in 2020, MoneyGram shares are up 25% year to date. (See MoneyGram stock analysis on TipRanks)
Northland Securities’ analyst, Michael Grondahl, believes MoneyGram has been executing a turnaround. The analyst also believes the payment company’s underlying business shows gradual improvement in retail and strong growth in digital/online.
Grondahl stated, “We continue to believe that MGI is on a path to return to revenue growth that is driven by the digital channel which now accounts for ~30% of transactions and ~20% of revenues and continues triple-digit y/y growth for cross border transactions.”
Grondahl maintains a Buy rating on MoneyGram with a $9.50 share price target, implying 38.7% upside potential to current levels.
Consensus among analysts on MGI is a Hold based on two analyst’s ratings of one Buy and one Sell. The average analyst price target of $7.75 implies $13.14% upside potential to current levels.
According to TipRanks’ Smart Score rating system, MoneyGram scores 4 out of 10 which implies that the stock is expected to perform in line with market expectations.
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