Humm Group Ltd

HUM: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$3.68	Tzgc	Bwmpxvgb

Exclusive Four-Year Flight Centre Deal Prompts an Upgrade to FlexiGroup’s FVE

Feb 4, 2020

A new four-year exclusive agreement with Flight Centre Travel Group drives an increase in no-moat FlexiGroup’s fair value estimate to AUD 1.90 per share, from AUD 1.75. FlexiGroup will be the exclusive provider of long-term interest free credit cards to Flight Centre’s customers under the agreement. Management expect revenue from its Australian cards segment to grow by double-digit CAGR over the four-year term of the agreement. However, given the headwinds facing credit card issuers more broadly, we are taking a more cautious approach, and forecasting revenue to grow by a CAGR of about 9%, up from our previous forecast of 7%.

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