The global pandemic has made decades of change happen in a few short months. A lot of business trends that were gaining in popularity made years of progress in the blink of an eye, as the world relied on technology to keep the economy running while everyone was forced into quarantine. Now, as the world remerges from the virus these trends are showing they are here to stay.
Two trends that have seen incredible growth and are refusing to slowdown are e-commerce and digital payment processing (fintech). In 2020 the global market size of e-commerce was $10.36 trillion, and is expected to reach $27.15 trillion by 2027, growing at a CAGR of 14.7%. And the global digital banking market was valued at $803.8 billion in 2018 and should reach $1610 billion by 2027, giving it a CAGR of 8.9%.
Both trends haven’t even begun to tap into their full potential and will continue to post incredible growth numbers as the world increasingly moves online. Plenty of companies have realized these trends and have moved into either fintech or e-commerce, with the majority of them seeing massive share price appreciation as they reap the rewards from sky-high demand. If a company could successfully deliver both e-commerce functionality and fintech services in one seamless platform, would present investors with quite possibly 10-bagger return potential or more.
The OLB Group (OLB) is a young and fast-growing technology company that has created an ingenious product offering combining both e-commerce and fintech services for their customers. More specifically, OLB is a commerce provider offering a full suite of product solutions in the merchant services and payment facilitator verticals. They accomplish this through their 4 main product offerings including an omni-channel cloud-based commerce platform, proprietary payment gateway, turn-key merchant services and a “white label” crowd funding platform.
Through their many product offerings OLB has been able to create an incredibly strong network effect, enabling them to grow and expand along with their customers. The company has established a strong foothold across the US with customers spread out over 130 industries in all 50 states. OLB is handling a transaction volume worth $965 million spread across 23.5 million transactions annually.
This impressive success so far however is really just the biproduct of an incredibly creative master growth plan. OLB is focused on acquiring small-medium sized business merchants who have been largely overlooked by the bigger payment processing companies, then, through integrating their cloud-based applications and solutions OLB can drastically increase the revenue and efficiency of each merchant. This strategy provides massive scalability through both continually acquiring new merchants, and, as their current merchants continue to grow so too will the profit margins from using OLB’s many product offerings.
With a management team that is bringing over 65+ years of experience within fintech, ecommerce, and software development OLB is showing tactical like execution of a growth plan that has the potential to scale exponentially.
Competitor Analysis Shows OLB’s True Value
With an impeccable track record so far and the company about to sign an LOI which will increase revenues by over 100% most would think OLB is trading at sky high valuations. To the contrary the company is actually displaying valuation metrics of being significantly undervalued, especially when compared to competitors who even though fall embarrassingly short in offering the same value and diverse set of products are trading at unjustifiably high valuations.
|Revenue||$11 million||$13 million||$161 million||$212 million|
|Market Cap||$39 million||$492 million||$1 billion||$1.4 billion|
GreenBox (GBOX) is a technology company specializing in the development, marketing, and sale of blockchain based payment solutions. The company has been a very exciting retail story over the last year with shares jumping 10x from $0.96 to over $9.60. Currently, GBOX generates $13 million in revenue with a market cap of over $400 million, representing a multiple of over 37x revenue. This frothy valuation needs to make investors look twice at OLB’s. We are not taking sides here but either GBOX is overvalued and a potential short idea or OLB is extremely undervalued and potentially the next one investors should be researching.
We also took a look at larger players like i3 Verticals, Inc. (NASDAQ:IIIV) and Paya Holdings (NASDAQ: PAYA). i3 Verticals (IIIV) specializes in providing integrated payment and software solutions to small-medium sized businesses in both the public and private sectors. They are currently generating $160 million in revenue and trading with a $1 billion market cap, representing a revenue multiple of 6.5x.
Paya Holdings (PAYA) through their subsidiaries is delivering cohesive payment and commerce technology helping customers accept and make payments, expedite receipts of money, and increase operating efficiencies. The company is currently generating $212 million in revenue with a $1.4 billion market cap which represents a revenue multiple of 6.84x.
All 3 of these examples help make the argument that OLB Group (NASDAQ: OLB) could see a true market valuation of 6.5x their $11 million in revenue, which would create a market cap of $71 million or represent a share price of over ~ $9.00, and with the recent acquisition we could easily justify a $20 share price.
The ecommerce and fintech market have been pushed ahead since the pandemic began and is locked in for robust future growth. OLB, through a strong network effect, diverse product offering, and flawless execution of their growth strategy have truly set themselves apart from the competition while still barely touching their total addressable market. Their competitors however, currently trading at multiples of over 37x revenue should make most investors nervous with obscene valuations impossible to justify. OLB not only has an incredible business model but has also been severely undervalued by the market. And with a recent acquisition set to increase revenue by over 100% serious investors simply cannot ignore this opportunity for titanic sized price appreciation. The markets rarely show such a disconnect between future growth prospects and current share price and with strong tailwinds at their backs OLB will certainly correct this mistake before too long.