Forget Bitcoin! Analysts think you should watch this ASX share in 2020

Here's why analysts think Wisr Ltd (ASX: WZR) can be a disruptor in the perosnal lending market in 2020 and beyond.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Bitcoin and blockchain technology have been heralded as key disrupters of the finance sector. Investing in disruption technologies can be extremely risky with variable investment returns and profitability.

Last week, analysts from corporate advisory service Moelis Australia initiated a buy rating on a disrupter in the personal lending market. The company in question is WISR Ltd (ASX:WZR) and here's why analysts think it has great potential for 2020 and beyond.

What does Wisr do?

Wisr is Australia's first neo-lender that has a major focus on consumer financial wellness. As an online lender, Wisr boasts an innovative business model and unique distribution channels that allow the company to attract consumers. 

The personal lending sector in Australia is worth approximately $50 billion and Wisr aims to disrupt the market by providing consumers with fairer credit programs and data driven platforms. Wisr aims to nurture a financial wellness culture by providing consumers with innovative finance products and the Wisr app that helps users pay down debt. The company also boasts the country's only credit score comparison service through WisrCredit.com.au

How has Wisr performed?

Wisr has had a positive start to 2020 with the company's share price up more than 35% since the start of January and has returned more than 466% in the past 12 months. Earlier this month, Wisr provided shareholders with an update on the company's performance in the second quarter of FY20.

For the second quarter, Wisr reported a record 36% growth in quarterly loan origination of $163.8 million to 31 December 2019. According to management, the performance in the second quarter shows that Wisr can grow its core lending business whilst also focusing on consumer wellness.

Bullish note

Analysts from Moelis Australia released a bullish note regarding their outlook for Wisr and issued a $0.28 share price target. Wisr's performance in the second quarter for FY20 was cited by analysts as an indicator of further acceleration in volumes. As a result, Wisr's revenue estimates for FY20 were revised 7.8% higher to $8.9 million for FY20.  

According to analysts, Wisr's commercialisation of new distribution channels and personal loans is still in its infancy. Analysts see further upside in loan volumes for Wisr as the company looks to take advantage of the large opportunity provided by the personal lending market.

Foolish takeaway

The Royal Commission into banking and lending, alongside the advent of open banking and positive credit reporting has presented Wisr with a large and addressable market opportunity. The focus on consumer wellness follows in the footsteps of companies like Afterpay Ltd (ASX:APT), which operates in the buy-now, pay-later sector.

Analysts from Moelis have provided excellent research on Wisr, however a bullish note should not prompt investors to automatically buy shares in the company. In my opinion, Wisr is well poised to take advantage of a large market opportunity and it is exciting to see disrupters focused on consumer wellness.

The Wisr share price is currently trading near all-time highs and if the company can continue to grow loan volumes there should be further upside. I think a prudent strategy would be to keep Wisr on a watchlist and wait for price action to confirm before making an investment decision.

Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Emotional euphoric young woman giving high five to male partner, celebrating family achievement, getting bank loan approval, or financial or investing success.
Share Gainers

Why Bowen Coal, Droneshield, Mesoblast, and St Barbara shares are racing higher today

These shares are ending the week positively. But why?

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Share Fallers

Why Cettire, Digico, KMD, and WiseTech shares are falling today

These shares are out of form on Friday. But why?

Read more »

Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys right now.

Read more »

Broker Notes

Brokers say these ASX growth stocks are top buys

Analysts have good things to say about these shares this month.

Read more »

Share Market News

Bell Potter names 2 of the best ASX 300 stocks to buy in 2025

These could be best buys next year according to the broker.

Read more »

A man looking at his laptop and thinking.
Share Market News

5 things to watch on the ASX 200 on Friday

On Tuesday, the S&P/ASX 200 Index (ASX: XJO) went into the Christmas break with a small gain. The benchmark index rose 0.25%…

Read more »

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
Broker Notes

Invest $1,000 into Pilbara Minerals and these ASX 200 stocks

Analysts have named these shares as top picks for a $1,000 investment. Let's see why.

Read more »

Happy young couple saving money in piggy bank.
Opinions

Want to start investing in ASX shares? Here's what I'd buy

This is where I’d begin to put my money in the stock market.

Read more »