Zacks_Analysts' Blog : MoneyGram Expands Mozido Alliance - Analyst Blog

Yesterday, MoneyGram International Inc. (MGI) announced an agreement with Dallas-based Mozido to provide global payment transfer services through certain mobile wallet applications of the company, which is a leading financial services provider for mobile network operators, financial institutions and retailers.

MoneyGram has been using Mozido’s mobile gateway service since 2009-end to provide international remittances to subscribers of SMART Communications, with which the company has a long-standing alliance.

The advantage of using Mozido lies in its compatibility with most cell phone network operators and a wide range of mobile hardware systems. The company’s Global Cloud Payment Network offers multiple channels for mobile transactions. Both MoneyGram and Mozido are among the leading companies in their respective areas of business and hence, the alliance will further strengthen the competence of both companies.

MoneyGram has been increasing its competitive strength by rapidly expanding its international presence. In the past two months, the company has spread its presence in countries such as Ukraine, China and India.

Earnings Review

MoneyGram reported third quarter 2011 earnings per share of 3 cents, in line with the Zacks Consensus Estimate but significantly higher than the loss of 30 cents in the year-ago quarter.

The Zacks Consensus Estimate for MoneyGram’s fourth-quarter 2011 earnings stand at 18 cents per share, up about 107% year over year. Of the 4 firms covering the stock, 3 revised their estimates downward, while no upward revisions were witnessed in the past 30 days.

Currently, the earnings for 2011 are expected to be around 90 cents per share, up 109% year over year. MoneyGram competes with Western Union Co. (WU).

The company carries a Zacks #2 Rank at present, which translates into a short-term Buy rating, with a slight upward pressure over the near term.