Lesaka Technologies (LSAK) AI Stock Analysis

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Lesaka Technologies

(NASDAQ:LSAK)

53Neutral

Lesaka Technologies shows potential with strong revenue growth and a positive earnings call outlook. However, ongoing profitability issues, high debt, and a negative P/E ratio weigh on its overall score. The stock's positive market momentum provides some optimism.

Lesaka Technologies (LSAK) vs. S&P 500 (SPY)

Market Cap

$356.06M

Dividend YieldN/A

Average Volume (3M)33.61K

Price to Earnings (P/E)―

Beta (1Y)0.32

Revenue Growth5.39%

EPS Growth-53.40%

CountryUS

Employees2,531

SectorTechnology

Sector Strength51

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)-0.61

Shares Outstanding79,124,596

10 Day Avg. Volume34,951

30 Day Avg. Volume33,613

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.65

Price to Cash Flow (P/CF)-10.30

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 TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Lesaka Technologies Business Overview & Revenue Model

Company DescriptionLesaka Technologies (LSAK) is a South Africa-based financial technology company that operates in the payment solutions sector. The company specializes in providing secure transaction processing, point-of-sale systems, and financial services tailored to the needs of underbanked and underserved communities. Lesaka Technologies focuses on leveraging advanced technology to facilitate financial inclusion and provide accessible financial services to consumers and businesses.

How the Company Makes MoneyLesaka Technologies generates revenue through a diverse range of financial services and technology solutions. The company's primary revenue streams include transaction fees from payment processing services, sales of point-of-sale systems, and fees from financial products and services tailored to underserved markets. Lesaka also partners with various financial institutions and retailers to expand its reach and service offerings, enhancing its revenue potential through collaborative ventures. These partnerships and its focus on leveraging technology to provide cost-effective and inclusive financial services are significant contributors to its earnings.

Lesaka Technologies Financial Statement Overview

Summary

Lesaka Technologies shows revenue growth but struggles with profitability, cost management, and high leverage. The balance sheet is moderately stable, but negative returns on equity and high debt levels remain concerns.

Income Statement

Neutral

Lesaka Technologies has experienced revenue growth over the years, indicating positive trajectory. However, the company struggles with profitability as evidenced by negative net profit margins and fluctuating EBIT and EBITDA margins. This suggests challenges in cost management and operational efficiency.

Balance Sheet

Neutral

The balance sheet reflects moderate stability with a decent equity ratio. However, the company's debt-to-equity ratio has increased, indicating rising leverage which may pose potential risks. The return on equity remains negative, reflecting ongoing unprofitability and inefficient use of equity.

Cash Flow

Negative

Lesaka Technologies shows improvement in operating cash flow but struggles with free cash flow due to high capital expenditures. The free cash flow remains volatile, leading to concerns about liquidity and sustainability in cash generation.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
576.60M	564.22M	527.97M	222.61M	130.79M	151.00M
	Gross Profit
137.71M	121.55M	110.43M	54.29M	34.54M	41.99M
	EBIT
2.45M	3.59M	-15.35M	-28.28M	-53.87M	-37.91M
	EBITDA
-1.76M	29.80M	9.99M	-26.50M	1.71M	-52.73M
	Net Income Common Stockholders
-45.58M	-17.44M	-35.07M	-40.23M	-13.18M	-67.67M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
184.34M	59.06M	35.50M	43.94M	198.57M	217.67M
	Total Assets
476.51M	558.45M	542.23M	656.57M	428.33M	453.68M
	Total Debt
5.27M	166.70M	170.05M	215.19M	18.96M	20.38M
	Net Debt
-179.07M	107.64M	134.55M	171.25M	-179.62M	-197.29M
	Total Liabilities
157.95M	303.16M	283.33M	342.22M	67.37M	78.49M
	Stockholders Equity
316.38M	255.29M	258.91M	314.35M	360.96M	375.19M
Cash Flow		Free Cash Flow
-7.06M	15.83M	-16.16M	-41.76M	-62.66M	-51.98M
	Operating Cash Flow
11.37M	28.79M	410.00K	-37.20M	-58.37M	-46.05M
	Investing Cash Flow
-15.54M	-16.41M	-16.46M	-193.69M	47.77M	223.12M
	Financing Cash Flow
-1.33M	-7.11M	-19.12M	122.26M	-13.08M	-48.84M

Lesaka Technologies Technical Analysis

Technical Analysis Sentiment

Negative

Last Price4.51

Price Trends

50DMA

4.77

Negative

100DMA

4.99

Negative

200DMA

4.94

Negative

Market Momentum

MACD

-0.09

Positive

RSI

42.32

Neutral

STOCH

60.89

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LSAK, the sentiment is Negative. The current price of 4.51 is below the 20-day moving average (MA) of 4.71, below the 50-day MA of 4.77, and below the 200-day MA of 4.94, indicating a bearish trend. The MACD of -0.09 indicates Positive momentum. The RSI at 42.32 is Neutral, neither overbought nor oversold. The STOCH value of 60.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LSAK.

Lesaka Technologies Risk Analysis

Lesaka Technologies disclosed 41 risk factors in its most recent earnings report. Lesaka Technologies 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

Lesaka Technologies Peers Comparison

Overall Rating

UnderperformOutperform

Sector (58)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IMXI	64 Neutral	$365.07M	6.59	41.43%	―	-0.20%	8.56%
CCSI	63 Neutral	$370.21M	4.14	-94.58%	―	-3.36%	17.62%
BAND	60 Neutral	$345.20M	―	-2.14%	―	24.52%	61.08%
Sector *	58 Neutral	$11.04B	9.83	-6.56%	3.16%	7.59%	-10.43%
LSAK	53 Neutral	$356.06M	―	-16.27%	―	5.39%	-53.40%
RXT	44 Neutral	$317.99M	―	81.52%	―	-7.44%	0.63%

* Technology Sector Average

Performance Comparison

LSAK

Lesaka Technologies

4.48

0.40

9.80%

IMXI

International Money Express

11.83

-9.48

-44.49%

BAND

Bandwidth

12.37

-4.79

-27.91%

RXT

Rackspace Technology

1.28

-0.24

-15.79%

CCSI

Consensus Cloud Solutions

18.75

6.24

49.88%

Lesaka Technologies Earnings Call Summary

Earnings Call Date: Feb 5, 2025 | % Change Since: -7.01% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong growth trajectory for Lesaka Technologies, Inc., driven by strategic acquisitions and expansion in the merchant and consumer divisions. However, challenges like the MobiKwik investment write-down and enterprise division losses are noted. The guidance for FY2026 indicates confidence in continued growth.

Highlights

Strong Market Position and Growth Potential

Lesaka Technologies, Inc. estimates its addressable market in South Africa at over $4 billion, expecting it to grow to more than $12 billion in five years, with a projected market growth rate of 10% to 15%. The company aims to increase its market share by targeting more than 10% in the medium term.

Record-High Quarterly Financial Performance

Group net revenue increased by 42% year-on-year, with the merchant segment's net revenue up 68% mainly due to the Adumo acquisition. Group adjusted EBITDA grew by 26% to 212 million Rand, exceeding the upper end of guidance.

Consumer Division Growth

The consumer division saw revenue increase by 31% year-on-year, with segment adjusted EBITDA growing 61%. The active EPE customer base increased by 11% to 1.6 million, with loan originations and insurance policy sales also setting records.

Positive Outlook with Robust EBITDA Guidance

Lesaka Technologies, Inc. provided guidance for FY2026, with group adjusted EBITDA expected to range between 1.25 billion Rand to 1.45 billion Rand, indicating a year-on-year growth of 42% in EBITDA.

Lowlights

MobiKwik Investment Write-Down

The company recorded a pre-tax write-down of 615 million Rand on its MobiKwik investment, leading to a net loss attributable to shareholders of 584 million Rand for the period.

Enterprise Division Losses

The enterprise division reported a loss of 0.5 million Rand, down from a 17 million Rand profit last year, attributed to investment in technology and the termination of unprofitable contracts.

High Interest Expense and Debt Levels

Net interest expense increased to 98 million Rand due to higher borrowing levels, primarily from the Adumo acquisition. Gross debt at the end of the quarter was 3.8 billion Rand.

Company Guidance

During the second quarter of fiscal 2025, Lesaka Technologies provided guidance that highlighted significant growth prospects and strategic positioning. The company anticipates an addressable market net revenue pool in South Africa of over $4 billion, expanding to more than $12 billion in five years, with the market growing by 10% to 15% annually. Lesaka aims to capture over 10% market share in the medium term, driven by differentiation as a customer-led company. The company achieved a 42% year-on-year increase in group net revenue and a 26% growth in group adjusted EBITDA to 212 million Rand. For FY2025, Lesaka reaffirmed its revenue guidance of 10 to 11 billion Rand and group adjusted EBITDA of 900 million to 1 billion Rand. The outlook for FY2026 includes an expected group adjusted EBITDA of 1.25 to 1.45 billion Rand, reflecting a 42% year-on-year growth. The company plans to leverage regulatory changes and digitization trends to enhance its market position and financial 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.