Market News

Paya’s 4Q Revenues Outperform Estimates; Street Is Bullish

Payment processor company, Paya Holdings, reported fourth-quarter revenues that beat Street estimates, driven by strong payment volumes.

Paya (PAYA) reported 4Q revenues of $54 million, which came in above the Street’s estimates of $53.3 million and grew 5.5% year-over-year, driven by a 15.7% increase in payment volumes. Integrated Solutions segment revenue increased 6.6% to $32.4 million, while Payment Services segment revenue grew 3.8% to $21.6 million.

Adjusted EBITDA soared 17.6% to $14.7 million. Furthermore, adjusted net income surged 67.7% year-on-year to $10.4 million.

The company’s CEO Jeff Hack said, “Accelerating volume trends in the fourth quarter combined with favorable revenue and EBITDA performance, demonstrates execution against our growth initiatives.”

Hack added, “Specifically, record new boardings on our Paya Connect platform, continued strength in our B2B [business-to-business] vertical, key partner wins and robust growth within our proprietary ACH [automated clearing house] solutions position us well as we look to deliver on our 2021 priorities.” (See Paya Holdings stock analysis on TipRanks)

As for 2021, the company expects to generate revenues in the range of $234-$242 million. Analysts anticipate revenues of about $238 million.

On Feb. 23, D.A. Davidson analyst Peter Heckmann initiated coverage on Paya stock with a Buy rating and a price target of $15 (27.3% upside potential). In a note to investors, the analyst said that the company is “under-appreciated,” but is better positioned to generate strong revenue and earnings growth over the next three years.

Overall, the rest of the Street has a bullish outlook on the stock, with a Strong Buy consensus rating based on 4 unanimous Buys. The average analyst price target of $16 implies upside potential of about 36% to current levels. PAYA has declined about 3.1% since it was listed on NASDAQ on Oct. 19, 2020.

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on PAYA, with 17.1% of investors increasing their exposure to PAYA stock over the last 7 days.

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