The global online payments platform Paysafe, Ltd. (PSFE) has recently caught the attention of Reddit Wallstreetbets and is trending higher on the news of joining the Russell 3000 list. Following the news, shares jumped as much as 18% to hit an intra-day high of $13.19 on Friday.
Shares gained 9.9% in just one day to close at $12.21 on June 25, as against an increase of 8.8% in one month and a decline of 9.6% from the company’s listing on March 31, 2021.
The Russell 3000 index consists of the 3,000 biggest U.S. stocks based on their market capitalization. As a result, fund managers tracking the index will have to buy shares of Paysafe.
Apart from being a meme stock, Paysafe has the potential to grow exponentially due to its exposure to the booming iGaming space. The company’s customers include the online sports betting platform DraftKings and the game-streaming platform Twitch. (See Paysafe stock chart on TipRanks)
After reporting a beat-and-raise first quarter, Paysafe projects its fiscal year 2021 revenue to fall in the range of $1.53 to $1.55 billion. The Street estimates revenue of $1.54 billion.
Susquehanna analyst James Friedman recently reiterated a Buy rating on the stock, with a price target of $17 per share, implying 39.2% upside potential from current levels.
Freidman believes Paysafe’s exposure to the iGaming market bodes well for the company. The analyst is also pleased with the company’s exit from high-risk verticals and sees August as a key month for Paysafe.
Another analyst, James Fotheringham of BMO Capital, initiated coverage of the stock with a Buy rating and a price target of $15, implying 22.8% upside potential.
Fotheringham believes the company is well-positioned to win in the nascent U.S. internet gaming market, with its specialized wallet services to both customers and merchants. He calls Paysafe the global internet gaming leader. The company is already live in 13 U.S. states.
Based on 8 unanimous Buys, the stock has a Strong Buy consensus rating. The average Paysafe analyst price target of $17 implies 39.2% upside potential from current levels.
Also, Paysafe scores a 9 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has a strong potential to outperform market expectations.
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