Paysafe Limited (PSFE) delivered mixed Q3 2021 results characterized by softer-than-expected revenues, reflecting performance challenges in the digital wallet business.
However, the company continues to affirm strong business momentum in high growth and disruptive markets. PSFE shares fell 41.68% to close at $4.24 on November 11.
Paysafe offers a specialized payments platform that enables businesses and consumers to connect and transact seamlessly. It offers online cash solutions and digital wallets. (See Top Smart Score Stocks on TipRanks)
Revenue in the quarter dropped 1% year-over-year to $353.6 million, missing consensus estimates of $370.63 million. Total payment volume increased 19% year-over-year to $31.1 billion. Paysafe Limited also saw 50% year-to-date revenue growth in the North American iGaming market.
Adjusted EBITDA landed in line with expectations at $106.4 million, down 1% year-over-year. Adjusted EBITDA margin shrunk to 30.1% from $30.2% in the same quarter last year. Net loss attributable to the company widened to $147,200 from $38,127 delivered the same quarter last year.
For the fourth quarter, Paysafe Limited expects revenue to be in the range of $355 million to $365 million, with full-year revenue expected to be between $1.47 billion and $1.48 billion. Q4 adjusted EBITDA is expected to range between $90 million and $100 million, with full-year EBITDA expected to be between $425 million and $435 million.
Revised Q4 and full-year guidance reflect gambling regulations and softness in key European markets.
Credit Suisse analyst Timothy Chiodo downgraded the stock to a Hold and cut-price target to $4 from $9, implying 5.7% downside potential to current levels.
Consensus among analysts is a Moderate Buy based on four Buys and four Holds. The average Paysafe Limited price target of $8.69 implies 105% upside potential to current levels.