Paysafe (PSFE) AI Stock Analysis

2,527 Followers

Top Page

Paysafe

(NYSE:PSFE)

57Neutral

Paysafe's overall stock score reflects a mix of steady revenue growth and improved profitability, tempered by high leverage and valuation concerns. The technical analysis suggests bearish momentum, while the earnings call provides a cautiously optimistic outlook with potential for organic growth acceleration. The lack of corporate events further underscores a need for strategic focus on managing financial risks and enhancing market position.

Positive Factors

Sales Pipeline

Paysafe's new sales pipeline remains promising with new product initiatives showing early signs of traction.

Valuation

Paysafe is trading at a significant discount to its peers, with an 18% FY1 EV/EBITDA discount compared to a 4% median discount over the last four years.

Negative Factors

Debt

The net debt to equity ratio is notably high at 244.2%.

Financial Performance

Adjusted EBITDA of $95 million was down 15% year-over-year, with margins decreasing due to lower gross margin and business mix.

Stock Volatility

The stock's 52-week range shows significant volatility between $12.02 and $26.25.

Paysafe (PSFE) vs. S&P 500 (SPY)

Market Cap

$754.13M

Dividend YieldN/A

Average Volume (3M)373.20K

Price to Earnings (P/E)39.1

Beta (1Y)1.41

Revenue Growth3.50%

EPS Growth95.90%

CountryUS

Employees3,300

SectorTechnology

Sector Strength76

IndustryInformation Technology Services

Share Statistics

EPS (TTM)0.34

Shares Outstanding59,333,363

10 Day Avg. Volume455,860

30 Day Avg. Volume373,198

Financial Highlights & Ratios

PEG Ratio0.20

Price to Book (P/B)1.00

Price to Sales (P/S)0.00

P/FCF Ratio6.60

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$16.55

Price Target Upside30.21% Upside

Rating ConsensusHold

Number of Analyst Covering6

Paysafe Business Overview & Revenue Model

Company DescriptionPaysafe Limited provides digital commerce solutions to online businesses, small and medium-sized business merchants, and consumers through its Paysafe Network worldwide. The company operates in two segments, US Acquiring and Digital Commerce. It provides PCI-compliant payment acceptance and transaction processing solutions for merchants and integrated service providers, including merchant acquiring, transaction processing, online solutions, fraud and risk management tools, data and analytics, and point of sale systems and merchant financing solutions under the Paysafe and Petroleum Card Services brands. The company also offers digital wallet solutions under the Skrill and NETELLER brands; and pay-by-bank solution under the Rapid Transfer brand. In addition, it provides eCash solutions, such as Paysafecash, a bill payment eCash solution that allow users to shop online and then pay offline in cash to finalize the transaction; paysafecard, a prepaid eCash solution; and paysafecard prepaid Mastercard that can be linked to a digital paysafecard account and used to make purchases. Further, it offers integrated and ecommerce solutions for online merchants and software-integrated merchants within integrated payment capabilities; online toolkit that allows merchants and integrated software vendor to build and scale their online commerce presence; and turn-key payments gateway solution that offers critical connectivity between merchant online sites and payment acceptance and transaction processing providers. Additionally, the company manages and provides various connections to card processing networks, acquiring banks, and transaction processors; and offers gateway connectivity,? shopping cart, tokenization and encryption, fraud and risk management, and support to payment alternatives, as well as provides integrations into eCommerce platforms and multiple alternative payment methods. Paysafe Limited is based in London, the United Kingdom.

How the Company Makes MoneyPaysafe generates revenue primarily through transaction fees charged to its business clients for payment processing services. This includes fees for facilitating credit card payments, digital wallet transactions, and alternative payment methods. The company's digital wallets, such as Skrill and Neteller, provide additional revenue streams through currency conversion fees, withdrawal fees, and other service charges. Paysafe also earns money from its online cash solutions, like Paysafecard, which enable consumers to make online purchases without needing a bank account or credit card. Significant partnerships with merchants, financial institutions, and technology providers enhance its service offerings and expand its market reach, contributing to its overall earnings.

Paysafe Financial Statement Overview

Summary

Paysafe has shown steady revenue growth and improved profitability. However, its high leverage poses a financial risk, and the growth in free cash flow is limited. Managing debt levels is crucial for long-term stability.

Income Statement

Positive

Paysafe's revenue has shown a steady growth trajectory, increasing from $1.42 billion in 2020 to $1.70 billion in 2024. The gross profit margin remains strong at 58%, while the net profit margin improved to 1.3% in 2024 from negative values in previous years. Despite this, EBIT and EBITDA margins reveal moderate profitability. The revenue growth rate between 2023 and 2024 was approximately 6.5%, reflecting stable growth.

Balance Sheet

Neutral

Paysafe's balance sheet reveals a high debt-to-equity ratio of 2.74, suggesting significant leverage, which poses financial risks. The equity ratio is relatively low at 18.3%, indicating a higher dependence on liabilities. However, the return on equity (ROE) improved to 2.52% in 2024, showing a positive yet modest return on shareholders' capital.

Cash Flow

Neutral

The cash flow statement indicates a stable operating cash flow, with a free cash flow growth rate of 1.1% from 2023 to 2024. The operating cash flow to net income ratio is healthy, suggesting efficient cash generation relative to net income. However, the free cash flow to net income ratio is lower, reflecting reduced cash available after capital expenditures.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.70B	1.60B	1.50B	1.49B	1.43B
	Gross Profit
989.07M	673.78M	882.11M	887.24M	891.67M
	EBIT
133.35M	166.36M	164.56M	320.42M	150.26M
	EBITDA
429.58M	435.88M	-1.52B	241.28M	257.60M
	Net Income Common Stockholders
22.16M	-20.25M	-1.86B	-110.33M	-126.71M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
216.68M	202.32M	260.22M	313.44M	387.62M
	Total Assets
4.81B	5.23B	5.96B	7.27B	7.41B
	Total Debt
2.41B	2.53B	2.68B	2.80B	3.31B
	Net Debt
2.19B	2.32B	2.42B	2.48B	2.92B
	Total Liabilities
3.93B	4.34B	5.10B	4.56B	5.48B
	Stockholders Equity
879.26M	883.31M	859.64M	2.57B	1.92B
Cash Flow		Free Cash Flow
133.31M	131.85M	774.03M	76.72M	322.19M
	Operating Cash Flow
253.80M	234.02M	924.08M	224.47M	409.11M
	Investing Cash Flow
-108.38M	-135.24M	-575.59M	-411.27M	-51.22M
	Financing Cash Flow
-280.80M	-771.03M	-80.54M	483.28M	-75.47M

Paysafe Technical Analysis

Technical Analysis Sentiment

Negative

Last Price12.71

Price Trends

50DMA

15.29

Negative

100DMA

16.97

Negative

200DMA

18.95

Negative

Market Momentum

MACD

-0.56

Positive

RSI

35.27

Neutral

STOCH

3.67

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PSFE, the sentiment is Negative. The current price of 12.71 is below the 20-day moving average (MA) of 14.75, below the 50-day MA of 15.29, and below the 200-day MA of 18.95, indicating a bearish trend. The MACD of -0.56 indicates Positive momentum. The RSI at 35.27 is Neutral, neither overbought nor oversold. The STOCH value of 3.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PSFE.

Paysafe Risk Analysis

Paysafe disclosed 49 risk factors in its most recent earnings report. Paysafe 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

Paysafe 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	$3.59B	14.08	6.34%	2.31%	21.67%	-17.91%
PAY	73 Outperform	$4.87B	98.28	10.80%	―	47.78%	74.61%
FLYW	69 Neutral	$1.38B	402.84	0.63%	―	20.97%	―
AI	63 Neutral	$3.21B	―	-32.07%	―	23.79%	4.10%
Sector *	60 Neutral	$11.59B	10.39	-7.23%	2.94%	7.46%	-10.76%
PSFE	57 Neutral	$754.13M	39.11	-0.04%	―	3.50%	95.90%

* Technology Sector Average

Performance Comparison

PSFE

Paysafe

12.71

-5.18

-28.95%

CNXC

Concentrix

56.22

-8.24

-12.78%

C3ai

24.16

-2.35

-8.86%

FLYW

Flywire

11.36

-5.44

-32.38%

PAY

Paymentus Holdings

38.93

20.32

109.19%

Paysafe Earnings Call Summary

Earnings Call Date:May 13, 2025

(Q1-2025)

% Change Since: -21.78%|

Next Earnings Date:Aug 19, 2025

Earnings Call Sentiment Neutral

The earnings call for Paysafe's Q1 2025 reflected a balanced performance. While there were notable achievements such as strong organic revenue growth, successful enterprise sales, and significant new product launches and partnerships, there were also challenges, including declines in adjusted EBITDA and revenue, as well as growth challenges in the SMB segment.

Q1-2025 Updates

Positive Updates

Organic Revenue Growth

Paysafe reported an organic revenue growth of 5% in Q1 2025, driven by strong growth from existing customers and new sales initiatives.

Enterprise Sales Success

In Q1, Paysafe signed over 100 enterprise-level contracts, which were broad-based across gaming, Latin America, and broader e-commerce within core verticals.

E-commerce Growth

E-commerce growth continued to be strong at 31% for the first quarter, with processing growth in iGaming up over 50% year-over-year.

New Product Launch in Latin America

Launched PagoEfectivo wallet in Peru, a leading cash and bank transfer payment solution, marking Paysafe's expansion in the high-growth Latin American payments landscape.

Partnership Expansion

Expanded partnerships with Fiserv and Tilled, enhancing product offerings like Clover Capital Solution for SMBs and PayFac solutions for ISVs in the US and Canada.

Negative Updates

Decline in Adjusted EBITDA

Adjusted EBITDA was $95 million, down from $112 million in the first quarter of last year, influenced by inorganic impacts and business mix.

Revenue Decline

Reported revenue declined by 4% to $401 million due to inorganic headwinds from FX, interest, and divestiture.

SMB Growth Challenges

SMB growth was tempered by a slower ramp in in-market direct sellers, with more work needed to optimize the SMB team and go-to-market channels.

Higher Attrition Rate

Attrition reduced revenue by approximately 12% in Q1, which was slightly higher than expected for the full year.

Company Guidance

In the first quarter of 2025, Paysafe reported a 5% organic revenue growth, driven by existing customer growth and new partnerships, despite a 4% decline in reported revenue to $401 million. Adjusted EBITDA was $95.2 million with a 23.7% margin. The company anticipates second-half acceleration with organic growth expected to reach 8-10%, bolstered by new products, expanded partnerships, and enhanced sales productivity. Merchant Solutions saw 6% organic growth, while digital wallets grew by 3% organically. Paysafe's strategic focus includes expanding its sales team and product capabilities, particularly in Latin America, where e-commerce is projected to grow at a 12% CAGR, reaching $29 billion by 2030.

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.