MLNK

MeridianLink Inc

TMT


Presented:03/21/2024
Price:$18.26
Cap:$1.39B
Current Price:$21.14
Cap:$1.59B

Presented

Date03/21/2024
Price$18.26
Market Cap$1.39B
Ent Value$2.30B
P/E RatioN/A
Book Value$6.48
Div Yield0%
Shares O/S76.32M
Ave Daily Vol234,029
Short IntN/A

Current

Price$21.14
Market Cap$1.59B
MeridianLink, Inc. operates as a holding company, which engages in the provision of cloud-based digital solutions. The firm offers its solutions to financial institutions including banks, credit unions, mortgage lenders, specialty lending providers, and consumer reporting agencies. The company was founded in May 2018 and is headquartered in Costa Mesa, CA.

Publicly traded companies mentioned herein: MeridianLink Inc (MLNK)

Highlights

The presenter is long shares of MeridianLink Inc (MLNK), a vertical software company that serves the credit union industry. MLNK was founded in 1998 and built out a customer base of 1,000+ credit unions with just 4 salespeople as of 2021. Its core product is a loan origination software for consumer loans (i.e., personal loans ex-mortgages). Until 2018, it was a classic undermanaged, founder-led, vertical software business that wasn’t taking price and didn’t have a well-defined go-to-market strategy but still built this successful business because it has a great product and a sticky use case (evidenced by best-in-class gross retention). In 2018, Thoma Bravo acquired MLNK and combined it with its main competitor CRIF Lending Solutions, then spent a few years integrating the business, building out its sales capabilities, and eventually took the business public in 2021. Since then, MLNK’s margins have contracted due to growth efforts, and the growth algorithm has been suppressed by recent secular headwinds. He expects these headwinds to unwind as interest rates decline and sees a path to margin expansion based on recent cost-cutting initiatives and strong operating leverage. As such, he expects FCF per share to double from $1 in 2024 to $2+ in 2028, creating strong upside in the stock.

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Idea Discussion

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