Paysafe (PSFE) operates at the intersection of two very now industries – digital payments and iGaming. Being on trend, however, hasn’t helped the stock in its early days as a publicly traded entity. That said, after a near-continuous 3-month slide, the shares got a big boost last week, following the news that Paysafe will be added to the Russell 3000 Index.
Either way, new index or not, following a recent chat with PSFE management, Susquehanna’s James Friedman thinks Paysafe is making all the right moves.
“The company continues to position itself well, leaning into the iGaming legalization opportunity and eCash waves,” the 5-star analyst said. “At a macro level, some of the impacts of global economic reopenings may impact the business lines unevenly – e.g., reopenings in Europe could get outside more, but gaming less.”
Despite “some mix shifts,” Friedman believes Q2 is tracking according to consensus estimates. As the US is now open and Europe’s reopening is in progress, Friedman believes volumes in the IPS (integrated payment solutions) segment could be “stronger than previously expected.”
That said, as it is in Europe where the company’s gateway services are displaying a noticeable uptick, Friedman says investors should take into account the fact take rates there are below average. Hence, the upside in volumes will probably result in “in-line revenues.”
Looking ahead, Friedman thinks August is set up to be a “key month.”
The company is keeping a close watch on August’s European reopening trends as an indicator of eCash and IPOS “health.”
“Should Europe’s economies continue to reopen (they started in June),” Friedman explained, “Demand for ‘at-home’ iGaming could wane. Alternatively, continued reopenings may be a tailwind for retail and travel and help fuel incremental volumes in the IPS segment.”
All in all, Friedman rates PSFE a Positive (i.e. Buy) along with a $17 price target. Investors could be pocketing gains of 39%, should the forecast be met in the year ahead. (To watch Friedman’s track record, click here)
All 7 other analysts tracking PSFE’s progress agree with Friedman’s assessment. All the ratings are to Buy, naturally culminating in a Strong Buy consensus rating. The shares are priced at $12.80 and their $17 average price target matches Friedman’s, in predicting a 39% upside. (See PSFE stock analysis 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.
