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Flexshopper, Inc. (FPAY)
:FPAY
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FlexShopper
(NASDAQ:FPAY)
54Neutral
Positive Factors
Financial Performance
FPAY reported results that beat consensus on revenue, adjusted EBITDA, and EPS due to a new strategy and improved credit quality.
Market Valuation
Investors are expected to be attracted to undervalued FPAY shares, which currently trade at a meaningful discount to larger lease-to-own peers.
Negative Factors
Legal Proceedings
FlexShopper is seeking both injunctive and monetary damages, which could be considerable as the company looks to recoup lost profits.
FlexShopper (FPAY) vs. S&P 500 (SPY)
Market Cap
$30.26M
Dividend YieldN/A
Average Volume (3M)136.93K
Price to Earnings (P/E)―
Beta (1Y)0.52
Revenue Growth24.46%
EPS Growth-2805.36%
CountryUS
Employees204
SectorIndustrials
Sector Strength72
IndustryCorporate Services
Share Statistics
EPS (TTM)-0.16
Shares Outstanding21,461,489
10 Day Avg. Volume104,414
30 Day Avg. Volume136,930
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.24
Price to Cash Flow (P/CF)-1.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2.50Price Target Upside77.30% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
FlexShopper Business Overview & Revenue Model
Company DescriptionFlexShopper, Inc. (FPAY) is a financial technology company operating in the United States, primarily within the sectors of consumer finance and retail. The company specializes in providing lease-to-own (LTO) solutions for consumers, offering a wide range of products including electronics, furniture, and appliances. FlexShopper operates an online marketplace where customers can shop for items with flexible payment options, aimed at consumers who may not have access to traditional credit.
How the Company Makes MoneyFlexShopper makes money through its lease-to-own model, where customers lease products over a specified term while making weekly payments. The company earns revenue from these lease payments, which include both the cost of the product and a lease service fee. FlexShopper also collects additional fees from customers who opt to purchase the leased item before the end of the lease term. The company partners with various retailers to offer their products through its platform, expanding its inventory and customer reach. Key revenue streams include lease income, early purchase option fees, and potential partnerships with retailers and manufacturers that extend their customer base and product offerings.
FlexShopper Financial Statement Overview
Summary
FlexShopper shows revenue and operational growth, but profitability and cash flow remain challenging due to high leverage and low equity returns.Income Statement
FlexShopper's revenue has shown a positive trend with a substantial increase in the TTM period compared to previous years. The gross profit margin is healthy, indicating efficient management of production costs. However, the net profit margin is weak, and the company has struggled with profitability in past years. The EBIT and EBITDA margins have improved in the TTM period, reflecting better operational performance.65
Positive
Balance Sheet
The balance sheet reflects a high debt-to-equity ratio, highlighting significant leverage and potential risk in financial stability. Stockholders' equity has improved, giving a better equity ratio. However, the return on equity remains low due to past negative net income, suggesting challenges in generating returns from shareholders' investments.55
Neutral
Cash Flow
The cash flow statements indicate negative free cash flow growth, primarily due to high capital expenditure and operational cash outflows. The operating cash flow to net income ratio is unfavorable, highlighting inefficiencies in converting profits to cash. The free cash flow to net income ratio is also weak, indicating cash flow challenges.50
Neutral
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 134.56M | 116.98M | 113.06M | 125.43M | 102.08M | 88.79M | Gross Profit |
| 65.12M | 104.48M | 109.67M | 46.25M | 35.35M | 28.57M | EBIT |
| 23.79M | 13.69M | -6.30M | 7.36M | 4.63M | 5.10M | EBITDA |
| 31.43M | 13.69M | 71.02M | 90.84M | 4.63M | 5.10M | Net Income Common Stockholders |
| 903.30K | -4.23M | 13.63M | 3.27M | -339.90K | 577.41K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 6.14M | 4.41M | 6.05M | 5.09M | 8.54M | 6.87M | Total Assets |
| 48.63M | 156.49M | 148.29M | 84.81M | 68.25M | 52.21M | Total Debt |
| 30.09M | 115.57M | 97.74M | 56.81M | 45.98M | 35.79M | Net Debt |
| 23.95M | 111.16M | 91.69M | 51.72M | 37.44M | 28.92M | Total Liabilities |
| 40.13M | 127.26M | 117.25M | 68.67M | 57.10M | 42.25M | Stockholders Equity |
| 8.49M | 29.23M | 31.03M | 16.14M | 11.15M | 9.97M |
| Cash Flow | Free Cash Flow | ||||
| -40.80M | -13.00M | -37.74M | -16.21M | -8.31M | -2.71M | Operating Cash Flow |
| -33.02M | -6.66M | -31.24M | -11.26M | -5.21M | -469.46K | Investing Cash Flow |
| -8.65M | -7.56M | -5.20M | -4.95M | -3.10M | -2.24M | Financing Cash Flow |
| 43.26M | 12.47M | 37.52M | 12.76M | 9.98M | 3.44M |
FlexShopper Technical Analysis
Negative
1.41
Price Trends
1.57
Negative
1.56
Negative
1.35
Positive
Market Momentum
-0.04
Positive
42.04
Neutral
32.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FPAY, the sentiment is Negative. The current price of 1.41 is below the 20-day moving average (MA) of 1.53, below the 50-day MA of 1.57, and above the 200-day MA of 1.35, indicating a neutral trend. The MACD of -0.04 indicates Positive momentum. The RSI at 42.04 is Neutral, neither overbought nor oversold. The STOCH value of 32.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FPAY.
FlexShopper Risk Analysis
FlexShopper disclosed 43 risk factors in its most recent earnings report. FlexShopper 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
FlexShopper Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $2.29B | 11.92 | 17.19% | ― | 25.51% | 36.96% | |
68 Neutral | $690.18M | 8.50 | 19.28% | ― | -2.78% | 24.39% | |
62 Neutral | $8.16B | 12.85 | 0.64% | 3.04% | 3.83% | -15.83% | |
54 Neutral | $30.26M | ― | 3.09% | ― | 24.46% | -2805.36% | |
54 Neutral | $1.10B | 5.95 | 31.77% | 1.78% | 2.29% | 55.85% | |
44 Neutral | $21.57M | ― | 26.79% | ― | 5.35% | 49.98% |
* Industrials Sector Average
Performance Comparison
FPAY
FlexShopper
1.41
0.21
17.50%
PRG
PROG Holdings
26.89
-4.92
-15.47%
ASPS
Altisource Portfolio Solutions SA
0.79
-1.87
-70.30%
WRLD
World Acceptance
120.10
-10.87
-8.30%
ENVA
Enova International
88.72
26.42
42.41%
FlexShopper Earnings Call Summary
Earnings Call Date: Mar 11, 2025 | % Change Since: 0.00% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Positive
The earnings call showed strong revenue and EBITDA growth, successful expansion in the B2B channel, and improved asset quality. Despite some concerns over a decline in net loan revenues and a delayed audit, the overall performance and strategic initiatives indicate positive momentum for FlexShopper.Highlights
Record-Breaking Revenue and Growth
Q3 2024 revenue increased 23% year-over-year to nearly $39 million, with adjusted EBITDA up 45% to more than $12 million, marking a quarterly record.
B2B Channel Expansion
Total lease funding approvals increased 33% to $77 million, with the signed store count growing 250% to approximately 7,800 locations.
Improved Asset Quality
Provision for doubtful accounts decreased from 32.1% to 22.2%, a 990 basis point improvement year-over-year.
Gross Profit and Margin Growth
Gross profit expanded 32.9% year-over-year, with the gross margin increasing to 58% in Q3 2024 from 54% in Q3 2023.
Retail Marketplace Growth
Retail revenue increased from $780,000 in Q1 2024 to $1.2 million in Q3 2024, with plans to expand product offerings and marketing.
Lowlights
Delayed Audit and Earnings Release
Grant Thornton may need additional time to finalize the audit of the company's Q3 financial results, leading to a potential SEC extension filing.
Decline in Net Loan Revenues
Net loan revenues decreased from $10.3 million last year to $9 million in Q3 2024 due to a bank partner exiting the high APR business.
Company Guidance
During the third quarter of 2024, FlexShopper reported significant growth, with total revenue increasing by 23% to a quarterly record of nearly $39 million. The company's adjusted EBITDA rose by 45% to over $12 million, while net income attributable to common stockholders was $1.2 million, or $0.05 per diluted share. The B2B channel showcased impressive results, with lease funding approvals up 33% to $77 million, and the number of signed store locations increased by approximately 250% to 7,800. In the B2C segment, retail revenue grew from $780,000 in Q1 to $1.2 million in Q3. The provision for doubtful accounts improved significantly, dropping to 22.2% from 32.1% the previous year, contributing to a gross margin expansion to 58%. The company also announced strategic actions, including a proposed rights offering aimed at raising capital to redeem preferred stock at a 50% discount, potentially increasing annual net income to common shareholders by $9 million.FlexShopper Corporate Events
Executive/Board Changes
FlexShopper Board Welcomes Patrick McCrory, Former Governor
Positive
Jan 22, 2025
On January 20, 2025, T. Scott King resigned from FlexShopper’s Board of Directors, and Patrick L. McCrory, former Governor of North Carolina, was elected to the board. McCrory’s extensive experience in public policy and business leadership is expected to add depth and value to FlexShopper’s strategic pursuits, enhancing shareholder value. The company’s Chairman and CEO expressed gratitude for King’s contributions and excitement for McCrory’s appointment.
Executive/Board ChangesBusiness Operations and Strategy
FlexShopper Revamps Board and Boosts CEO Compensation
Positive
Dec 20, 2024
FlexShopper announced changes to its Board of Directors and amendments to an executive employment agreement. Sean Hinze resigned from the board, and Denis Echtchenko, with extensive investment experience, was elected as a new director, potentially enhancing the company’s strategic direction. Moreover, the company amended the employment agreement with CEO H. Russell Heiser Jr., increasing his salary and bonus potential, and awarding restricted stock units, indicating a commitment to retaining and incentivizing top leadership.
Private Placements and Financing
FlexShopper Announces Rights Offering for Stockholders
Neutral
Dec 2, 2024
FlexShopper, Inc. has announced a rights offering, providing current stockholders the opportunity to purchase up to 35 million units, each comprising common stock and several purchase rights, at a fixed price. This move allows investors to potentially increase their holdings, with an over-subscription privilege for those fully exercising their basic rights, although any unexercised subscription rights will expire, possibly diluting ownership stakes.
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.