Investors in Paysafe (PSFE) could be feeling like they have been on a nauseating roller-coaster ride. Shares of the online payments company swung ~19% on Wednesday, before giving back most of those gains by the end of the day.
Investors may have been excited about the excellent revenue stats, willing to soak up any good news on offer considering the online payments company stock has been down 63% over the past half-year. This lull, combined with skyrocketing inflation, impending interest rate hikes, and a war raging in Europe, may have sparked the impulsive share spike and subsequent dip on Wednesday.
PSFE reported that revenue rolled in at $372 million in Q421, beating both the consensus forecast of $357 million and the company’s own guidance of $365 million. Adjusted EBITDA jumped 11% year-over-year to $105 million, ahead of the Street’s expectation of $94 million.
Looking ahead, Paysafe expects sales in Q1 to range between $355 million to $366 million, constituting a decrease of 4.5% year-over-year at the midpoint. Furthermore, the company set its 2022 adjusted EBITDA forecast to be $450 million, a small 1.3% increase y/y.
Writing for Evercore, analyst David Togut commented, “2022 will be a transition year with 2023 demonstrating the first potential proof points of improvement in the digital wallet business. PSFE faces structural headwinds from regulatory changes in digital wallets fuelling a mid to high teens revenue decline partially offset by inorganic contribution in eCash and double-digit growth in Integrated Processing.”
Based on all of the above, Togut maintained his In-line (i.e. Hold) rating on Paysafe shares. But the analyst might as well have said “buy” — because he thinks the stock, currently trading at $3, could zoom ahead to $4 within a year, delivering 34% profits to new investors. (To watch Togut’s track record, click here)
So, that’s Evercore’s take, what about the rest of the Street’s view on PSFE’s prospects? Based on 4 Buys, 2 Holds and 1 Sell, the stock has a Moderate Buy consensus rating. The average price target stands at $5.75, suggesting ~92% upside from current levels. (See PSFE stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
