BM Technologies Inc

BM Technologies, Inc. (NYSE: BMTX) is a financial technology company. The Company facilitates deposits and banking services between a customer and its partner bank, Customers Bank and First Carolina Bank, (the Partner Banks), which are related parties. The Company provides high-tech digital banking and disbursement services to consumers and students nationwide through a full service fintech banking platform, accessible to customers anywhere and anytime through digital channels.

Recent Business and Financial Updates

• First Quarter 2024 Financial Highlights: For the first quarter of 2024, BMTX reported operating revenues of USD 16.2 million, a notable increase from USD 13.4 million in the same period in 2023. The company achieved a net income of USD 0.7 million, or USD 0.06 per diluted share, compared to a net loss of USD 5.0 million, or USD 0.43 per diluted share, in Q1 2023. Core EBITDA totaled USD 1.4 million, a significant improvement from a negative USD 1.9 million in the previous year. The company maintained strong liquidity with USD 14.6 million in cash, USD 4.8 million in working capital, and no debt as of March 31, 2024.
• First Quarter 2024 Operating Highlights: During the first quarter of 2024, average serviced deposits were USD 828 million, with ending serviced deposits at USD 820 million. Debit cards spend for the quarter totalled USD 809 million. The company recorded approximately 100,000 new account sign-ups in Q1 2024. Higher Education Organic Deposits, which are indicative of primary banking behavior, totaled USD 449 million for the three months ended March 31, 2024.
• Higher Education Vertical: In the first quarter of 2024, BMTX retained 99% of its Higher Education institutional clients and signed three new colleges and universities, adding approximately 16,000 students to BankMobile Disbursements and the BankMobile Vibe checking account. The company disbursed over USD 4.3 billion in refunds to students, with 12% (USD 523 million) disbursed into BankMobile Vibe checking accounts. The Higher Education segment saw a rebound in community college enrollments, increasing application flow and customer acquisition opportunities. Average serviced deposits and ending serviced deposits in Higher Education were USD 537 million and USD 535 million, respectively. Debit card point-of-sale spend increased by 3% year-over-year. Deposits and spend per 90-day active account were USD 2,025 and USD 2,396, respectively. In Q1 2024, the company launched BMTX Identity Verification (IDV), a SaaS product enhancing fraud mitigation during student enrollment. This service, part of the company’s improved technology stack, aims to increase the stickiness and lifetime value of existing higher education relationships. Additionally, the company completed its technology transformation with an updated mobile app and web interface to improve user experience and features.
• BaaS Vertical: For the BaaS segment, annualized debit card spend for highly active users reached USD 20,100, with an average deposit balance per account of USD 1,668 as of March 31, 2024. This cohort represents 23% of active accounts, up from 21% in the previous year. BaaS average serviced deposits and ending serviced deposits were USD 290 million and USD 284 million, respectively. Debit card point-of-sale spend increased by 1% year-over-year in Q1 2024.
• Profit Enhancement Plan (PEP): BMTX continues to execute its Profit Enhancement Plan (PEP), which reduced Core Operating Expenses by approximately USD 9.5 million in 2023. The company anticipates further cost savings from this initiative in 2024.
• Technology Initiatives and Outlook: Jamie Donahue, President and Chief Technology Officer, emphasized the company’s commitment to modernizing its platform architecture and offering innovative products. The company is focused on introducing a rewards engine, enhancing the direct deposit experience, and improving external account linking for funding. These features aim to make the BankMobile Vibe account a feature-rich, lifelong checking and savings account.
• Growth Initiatives and Outlook: BMTX expects revenue growth in 2024 driven by investments in the Higher Education vertical and the full-year impact of Durbin-exempt interchange rates on debit card spend. The company also anticipates positive Core EBITDA in 2024, supported by higher revenues and stricter cost controls implemented under the PEP.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands upward trending inside overbought levels with value of 85.53, with expectations of a consolidation or a correction in the stock price. Additionally, the stock's current positioning is above both the 50-period SMA and 200-period SMA, which may serve as dynamic short to medium-term support levels.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘WATCH’ rating has been given to BM Technologies, Inc. (NYSE: BMTX) at the closing market price of USD 2.80 as of May 16, 2024. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is May 16, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

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.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.