Paymentus Holdings (PAY) AI Stock Analysis

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Paymentus Holdings

(NYSE:PAY)

73Outperform

Paymentus Holdings shows a strong financial position with impressive revenue and profit growth, supported by low leverage and improving cash flows. Technical analysis indicates positive price momentum, though caution is advised due to overbought conditions. The high P/E ratio suggests potential overvaluation, and the earnings call reflects strong performance but notes some concerns about future margins and revenue guidance. Overall, the stock is promising but requires careful monitoring of valuation and market conditions.

Positive Factors

Customer Base

Diverse wins across sectors like insurance, government services, municipalities, utilities, education, telecommunications, banks, and property management indicate a broad customer base.

Earnings

Q1 results again outstanding with gross revenue increased by 49%, driven largely by increased billers and transactions.

Growth Potential

The implementation pipeline remains large and early implementations have not created a gap, indicating sustained growth potential.

Negative Factors

Guidance

The 1Q & '25 CP guide came in below the Street, both 3% below.

Market Competition

Consumer preferences don't change to new payment methods, IPN network/partnerships don't materialize, competitive and fragmented market, pricing pressure.

Revenue Growth

Revenue growth guidance for Q4 is expected to be down sequentially due to unknown seasonality from new billers added.

Paymentus Holdings (PAY) vs. S&P 500 (SPY)

Market Cap

$4.61B

Dividend YieldN/A

Average Volume (3M)453.54K

Price to Earnings (P/E)93.0

Beta (1Y)1.19

Revenue Growth47.78%

EPS Growth74.61%

CountryUS

Employees1,307

SectorTechnology

Sector Strength65

IndustryInformation Technology Services

Share Statistics

EPS (TTM)0.14

Shares Outstanding35,123,280

10 Day Avg. Volume546,766

30 Day Avg. Volume453,543

Financial Highlights & Ratios

PEG Ratio5.22

Price to Book (P/B)8.82

Price to Sales (P/S)0.00

P/FCF Ratio47.21

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$36.00

Price Target Upside-5.76% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering6

Paymentus Holdings Business Overview & Revenue Model

Company DescriptionPaymentus Holdings, Inc. provides cloud-based bill payment technology and solutions. The company offers electronic bill presentment and payment services, enterprise customer communication, and self-service revenue management to billers through a software-as-a-service technology platform. The company serves utility, financial service, insurance, government, telecommunication, and healthcare industries. The company was founded in 2004 and is based in Redmond, Washington.

How the Company Makes MoneyPaymentus Holdings generates revenue primarily through transaction fees charged for each payment processed on its platform. This includes fees from billers who utilize its services to facilitate payments from their customers. Additionally, the company earns money from subscription fees for access to its platform, which provides a suite of billing and payment management tools. Key revenue streams also include value-added services such as analytics and reporting, customer communication tools, and payment optimization features. Paymentus maintains strategic partnerships with financial institutions, technology companies, and payment processors, which enhance its service offerings and broaden its market reach.

Paymentus Holdings Financial Statement Overview

Summary

Overall, Paymentus Holdings demonstrates strong financial health with significant revenue and profit growth, solid equity positioning, and improving cash flows. The company's low leverage and increasing profitability indicate a stable financial trajectory, although careful management of liabilities is essential to maintain this stability. The positive trends across all financial statement verticals highlight a promising outlook in the Information Technology Services industry.

Income Statement

Very Positive

Paymentus Holdings displays robust revenue growth, with Total Revenue increasing from $301.8 million in 2020 to $962.1 million TTM. Gross Profit Margin remains healthy at 26.1% TTM. The company's Net Profit Margin improved to 5.3% TTM from a negative margin in 2022, indicating better profitability management. EBIT and EBITDA margins have also shown positive trends, suggesting operational efficiency improvements.

Balance Sheet

Positive

The company maintains a strong equity position, with a Debt-to-Equity ratio of 0.02 TTM, indicating low leverage. Stockholders' Equity has been consistently growing, reflecting a solid financial base. The Equity Ratio is robust at 84.7% TTM, emphasizing financial stability. However, a slight increase in liabilities could pose future risks if not managed well.

Cash Flow

Very Positive

Paymentus Holdings has shown significant growth in Operating Cash Flow, reaching $103.1 million TTM, and a strong Free Cash Flow of $93.6 million TTM. The Free Cash Flow to Net Income Ratio is favorable, indicating good cash flow management relative to earnings. Despite past fluctuations, the positive trajectory in cash flow metrics suggests improving liquidity and financial health.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
962.11M	871.75M	614.49M	497.00M	395.52M	301.77M
	Gross Profit
251.47M	238.17M	182.34M	149.68M	121.38M	92.63M
	EBIT
52.20M	44.86M	18.09M	-2.98M	10.37M	18.43M
	EBITDA
72.92M	81.34M	48.69M	21.09M	10.37M	20.00M
	Net Income Common Stockholders
50.76M	44.17M	22.32M	-513.00K	7.04M	13.71M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
143.64M	209.41M	179.36M	147.33M	168.39M	46.67M
	Total Assets
466.54M	576.25M	504.86M	461.54M	472.94M	124.87M
	Total Debt
11.36M	8.41M	10.51M	10.82M	8.80M	10.03M
	Net Debt
-132.28M	-201.00M	-168.85M	-136.51M	-159.58M	-36.64M
	Total Liabilities
66.50M	90.65M	75.25M	64.36M	86.81M	40.50M
	Stockholders Equity
400.04M	485.60M	429.62M	397.18M	386.13M	84.38M
Cash Flow		Free Cash Flow
93.63M	63.18M	34.53M	-11.43M	-916.00K	20.77M
	Operating Cash Flow
103.12M	63.63M	68.83M	19.87M	19.60M	35.62M
	Investing Cash Flow
-35.53M	-36.76M	-34.30M	-34.56M	-77.92M	-15.14M
	Financing Cash Flow
-1.69M	-207.00K	-1.20M	-37.28M	213.49M	-1.36M

Paymentus Holdings Technical Analysis

Technical Analysis Sentiment

Positive

Last Price38.20

Price Trends

50DMA

29.20

Positive

100DMA

30.32

Positive

200DMA

27.85

Positive

Market Momentum

MACD

2.37

Negative

RSI

78.29

Negative

STOCH

93.93

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PAY, the sentiment is Positive. The current price of 38.2 is above the 20-day moving average (MA) of 32.46, above the 50-day MA of 29.20, and above the 200-day MA of 27.85, indicating a bullish trend. The MACD of 2.37 indicates Negative momentum. The RSI at 78.29 is Negative, neither overbought nor oversold. The STOCH value of 93.93 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PAY.

Paymentus Holdings Risk Analysis

Paymentus Holdings disclosed 57 risk factors in its most recent earnings report. Paymentus Holdings reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Paymentus Holdings Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNXC	74 Outperform	$3.56B	13.94	6.34%	2.44%	21.67%	-17.91%
PAY	73 Outperform	$4.61B	93.03	10.80%	―	47.78%	74.61%
WNS	72 Outperform	$2.53B	14.09	21.21%	―	-0.64%	30.96%
FLYW	67 Neutral	$1.32B	386.17	0.63%	―	20.97%	―
Sector *	60 Neutral	$11.39B	10.50	-6.42%	2.97%	7.77%	-11.17%
PSFE	58 Neutral	$917.89M	43.87	2.51%	―	6.48%	―
AI	53 Neutral	$3.10B	―	-32.07%	―	23.79%	4.10%

* Technology Sector Average

Performance Comparison

PAY

Paymentus Holdings

38.20

19.66

106.04%

WNS

53.56

3.10

6.14%

PSFE

Paysafe

16.25

0.58

3.70%

CNXC

Concentrix

55.66

-5.47

-8.95%

C3ai

24.20

-0.75

-3.01%

FLYW

Flywire

11.29

-5.92

-34.40%

Paymentus Holdings Earnings Call Summary

Earnings Call Date:May 05, 2025

(Q1-2025)

% Change Since: 11.92%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Positive

The earnings call highlights Paymentus's strong financial performance, robust cash flow, and strategic market positioning in essential sectors. The company reported significant revenue and profit growth and raised its guidance for the year. However, there are concerns about declining contribution margins and cautious revenue guidance due to uncertainties with large enterprise customers.

Q1-2025 Updates

Positive Updates

Strong Financial Performance

Paymentus reported a revenue of $275.2 million for Q1 2025, marking a 48.9% increase year-over-year. Contribution profit increased by 26.3% to $87.6 million, and adjusted EBITDA rose by 51.3% to $30 million. The adjusted EBITDA margin reached a record 34.2%.

Positive Market Positioning

Paymentus continues to benefit from serving essential sectors of the economy, such as utilities, telecommunications, and insurance, with non-discretionary bill payments constituting a significant portion of the business.

Strong Cash Flow and Liquidity

The company ended Q1 2025 with $249.6 million in cash and cash equivalents, up from $209.4 million at the end of 2024. Free cash flow for the quarter was a record $41.1 million.

Diverse Client and Partner Base

Paymentus signed clients across various verticals, including utilities, government services, telecommunications, and insurance. New channel partners were also added, enhancing the partner ecosystem.

Sustained Growth Outlook

Guidance for full-year 2025 was raised, with expected revenues of $1.075 billion to $1.09 billion, reflecting a 24.2% year-over-year growth at the midpoint. Adjusted EBITDA is expected to grow by 27.4% year-over-year.

Negative Updates

Contribution Margin Decline

The contribution margin for Q1 2025 was 31.8%, down from 33.4% in the previous quarter and 37.5% in the prior year period. This decline reflects the mix of large, higher volume enterprise billers.

Cautious Revenue Guidance

Despite strong Q1 performance, gross revenue guidance for Q2 2025 was slightly conservative due to uncertainty about the growth patterns of large enterprise customers.

Company Guidance

During the first quarter of 2025, Paymentus Holdings reported robust financial results, including a 48.9% year-over-year increase in revenue to $275.2 million, driven largely by increased clients and transactions. Contribution profit rose by 26.3% to $87.6 million, while adjusted EBITDA surged by 51.3% to $30 million, marking a record adjusted EBITDA margin of 34.2%. The company also achieved a rule of 40 score of 61, reflecting strong growth and profitability. In terms of guidance, Paymentus expects Q2 2025 revenues between $255 million and $260 million, with contribution profit ranging from $89.5 million to $91.5 million and adjusted EBITDA between $28 million and $30 million. For the full year 2025, revenue is projected to reach $1.075 billion to $1.09 billion, with contribution profit and adjusted EBITDA anticipated at $363 million to $369 million and $118 million to $122 million, respectively. The company continues to focus on serving the non-discretionary side of the domestic economy and remains optimistic about future growth opportunities.

Paymentus Holdings Corporate Events

Executive/Board Changes

Paymentus Holdings Unveils 2025 Executive Compensation Plan

Neutral

Mar 19, 2025

On March 13, 2025, Paymentus Holdings, Inc. announced the adoption of its 2025 Executive Incentive Compensation Plan, following a review by the board of directors and insights from an independent compensation consultant. The plan outlines the base salary and target bonus percentages for key executives, including a 3% salary increase from 2024. The performance metrics for the plan are equally weighted and include gross revenue, non-GAAP contribution profit, Adjusted EBITDA, Adjusted EBITDA less capitalized software, and individual performance.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.