The next two months will be decisive for the Mosaic (MOSI3), said the Itaú BBA. This is the period to know whether the company’s cashback initiative will succeed or not.
In analysts’ opinion, the likelihood of an inflection point in Mosaico’s current downtrend is highly dependent on the results of cashback solutions.
“Mosaic has faced a challenging landscape, with cashback and discount coupon companies offering consumers ways to save money when shopping online,” they commented.
Itaú BBA’s Banking and Financial Services analysis team recognized that Mosaico has plans to fight back against growing competition through its expansion into cashback, coupons, editorial content, among other services. But executing this strategy is not simple.
“The company’s cashback, for example, was initially implemented with limited functionality in May 2021 and is far from being a complete solution,” said Itaú BBA.
Limiting the cashback initiative to just a portion of the partners was a risky move. The company is lagging behind, and the stock decline reflects market sentiment towards the name.
“On the day we started our coverage (March 16, 2021, before the company announced the results for the fourth quarter of 2020), the stock traded at R$27 per share. Since then, the company has delivered three sets of quarterly results with GMV [volume bruto de mercadorias] and net revenues consistently below expectations (ours and the market), reflecting on the share price”, highlighted the analysts.
For Itaú BBA, the price was affected by growing concerns about the growth of the core business of the owner of the price comparison platforms Zoom and Buscapé, as rival companies have been gaining ground in recent quarters.
Also, price comparison tools are lagging behind. Little by little, cashback, discount coupons and social commerce platforms gain more relevance.
For now, Itaú BBA has decided to adopt a more cautious stance – including for Mosaico’s cashback initiatives. The institution downgraded the outperform recommendation (expected performance above the market average) to market perform (expected performance in line with the market average) and stipulated a new target price of R$ 13 for 2022 (compared to R$ 39 for 2021 ).
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