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Paysafe: What’s on the Menu for Q1 Earnings
Stock Analysis & Ideas

Paysafe: What’s on the Menu for Q1 Earnings

This week will see more earnings season action and before market activity kicks off on Wednesday, Paysafe (PSFE) will step into the spotlight to deliver Q1’s financials.

It has been a busy time since the company last dialed in its quarterly update. There have been announcements of several new or enhanced relationships in the North American iGaming segment, including a partnership with Resorts WorldBET, Resorts World New York’s mobile sportsbetting app; a slew of collaborations with sports-betting apps launched in Ontario (PointsBet, theScore Bet, and others) and Paysafe has extended its partnership with betPARX to include states other than Michigan (Pennsylvania and New Jersey). To allow for underbanked consumers to pay for auto loans with its eCash solution, the business also established a partnership with Exeter Finance. Not to mention, former FIS President Bruce Lowthers has been hired as the new CEO.

A glance at website traffic in the quarter shows plenty of activity too. Unique Visitors (UVs) increased by 59% from 4Q21 to 4Q22. On a year-over-year basis, the uptick is even more pronounced; there were only 446,680 UVs in 1Q21 but that swelled to 2.32 million in 1Q22 – a 420% increase.

Looking ahead to the print, RBC’s Daniel Perlin thinks investors are likely to focus on several areas, including “1) growth & outlook for U.S. iGaming, 2) new growth initiatives by the recently named CEO, 3) digital wallet performance, and 4) updates on leverage and cash flow generation.”

As for the results, the analyst expects revenue to drop by 4% from the same period last year to $361 million, with adj. EBITDA clocking in at $98.3 million and EPS at $0.00. Consensus has $359 million, $96.8 million and $0.02, respectively.

Like many, Paysafe shares have taken a real beating over the past year (down by 79%), but the 5-star analyst expects the stock to bounce back; Perlin’s Outperform (i.e., Buy) rating is accompanied by a $5 price target, which makes room for returns of 82% over the next year. (To watch Perlin’s track record, click here)

Looking at the consensus breakdown, based on 4 Buys, 2 Holds and 1 Sell, the stock claims a Moderate Buy consensus rating. That said, even the skeptics thinks the shares are now severely undervalued; going by the $5.42 average target, they will appreciate by 98% over the one-year timeframe. (See Paysafe 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.

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