Down 21% in less than 2 months, this FTSE small-cap stock’s worth a look today

The FTSE AIM 100 index is made up of the top 100 companies by market capitalisation listed on the Alternative Investment Market (AIM). And it’s home to some really interesting growth stocks.

With a market-cap of Â£516m, Boku‘s (LSE:BOKU) one such example. It’s a fintech firm that connects global tech giants such as Amazon, Netflix and Spotify to more than 114m people worldwide who either donât have a debit/credit card or prefer not to use them.Â

Let’s take a look at Boku’s 2025 results — released Wednesday (17 March) — to see why the stock jumped almost 8%.

A mobile-first payment network

When Boku listed in 2018, it was focused on carrier billing (charging items and services to your phone bill). While still active in that market, which accounted for almost 55% of revenue last year, the firm’s branched out into local payment methods (LPMs) and bundling.

LPMs include account-to-account and digital wallets. Most of the firm’s growth here is coming from Southeast Asia, where hundreds of millions of people now use digital wallets, including GrabPay (Southeast Asia), MoMo (Vietnam), and GCash (the Philippines).

Bundling is obviously when providers offer more attractive packages. For example, getting six months of Spotify or Disney+ included with your mobile phone plan. Boku processes the payment, taking a small cut.

Therefore, the firm sits at the intersection of some really big growth trends (global proliferation of smartphones, digital payments, streaming, gaming, e-commerce, etc).

Strong growth

All three businesses are growing, but digital wallets and bundling are really taking off, with revenue growth of 67% and 71% respectively last year. This saw group revenue increase 30% year on year to $128.8m — a doubling of the top line since 2022.

	FY 2025	Year-on-year growth
Direct carrier billing	$70.4m	+9%
Digital wallets and account-to-account	$43.5m	+67%
Bundling	$14.9m	+71%
Total group revenue	$128.8m	+30%

Monthly active users jumped 31% to 114.4m, while total payment volume rose 27% to $15.7bn. CEO Stuart Neal said: “As global e-commerce becomes increasingly dependent on a diverse range of payment methods, our role as a growth partner to global merchants around the world continues to deepen.â

Another thing I like here is that the payments company is profitable. Last year, adjusted EBITDA increased 36% to $41.3m, supporting an operating profit of $18.9m. The firm is debt-free and ended December with $103m of its own cash.

This year, City analysts expect earnings per share to increase around 26%. This puts the stock on a forward price-to-earnings ratio of about 22, which I don’t consider expensive for a fast-growing global fintech firm.

Over the medium term, Boku’s targeting organic compound annual revenue growth above 20%. And a final thing worth noting is that the company’s moving into cross-border payments and developing new payment capabilities like stablecoins. So Boku isn’t resting on its laurels.

Final thoughts

As for risks, there’s the potential for adverse currency fluctuations as well as a global economic slowdown. Also, there’s plenty of competition in local payments in Asia Pacific and Latin America (it also operates in Brazil).

That said, global e-commerce is projected to reach $11trn by 2028, so this is a massive market that can accommodate lots of winners. The growth opportunities are certainly there, and if Boku can seize them, it should be a larger company a few years from now.

As such, I reckon this under-the-radar AIM stock is worth considering at 177p.

The post Down 21% in less than 2 months, this FTSE small-cap stock’s worth a look today appeared first on The Motley Fool UK.

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Ben McPoland has no position in any of the shares mentioned. The Motley Fool UK has recommended Amazon. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.