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Paymentus Holdings (PAY)
NYSE:PAY
US Market

Paymentus Holdings (PAY) AI Stock Analysis

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Paymentus Holdings

(NYSE:PAY)

Rating:70Neutral
Price Target:
$35.00
▲(12.76%Upside)
Paymentus Holdings exhibits strong financial performance and promising earnings call highlights, which are the most significant strengths. However, technical analysis indicates bearish trends, and the high P/E ratio suggests potential overvaluation, which could pose risks to investors. The absence of a dividend yield may also be a downside for some investors.
Positive Factors
Financial Performance
Q1 results again outstanding and 2025 guidance raised.
Revenue Growth
Q1 gross revenue increased by 49%, driven largely by increased billers and transactions.
Negative Factors
Guidance
The 1Q & '25 CP guide came in below the Street, both 3% below.

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

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 generates revenue through a combination of transaction fees, subscription fees, and service charges. The company earns transaction fees each time a payment is processed through its platform, which constitutes a significant portion of its income. Additionally, Paymentus offers subscription-based services to clients who use its software for billing and payment management, providing a steady stream of recurring revenue. The company also benefits from strategic partnerships with banks, financial institutions, and other service providers, which help expand its market reach and customer base. These partnerships often involve revenue-sharing arrangements that contribute to Paymentus's overall earnings.

Paymentus Holdings Earnings Call Summary

Earnings Call Date:May 05, 2025
(Q1-2025)
|
% Change Since: -9.05%|
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 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
87
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
78
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
82
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue962.11M871.75M614.49M497.00M395.52M301.77M
Gross Profit251.47M238.17M182.34M149.68M121.38M92.63M
EBITDA82.24M81.34M27.39M6.39M23.67M26.50M
Net Income50.76M44.17M22.32M-513.00K9.30M13.71M
Balance Sheet
Total Assets590.89M576.25M504.86M461.54M472.94M124.87M
Cash, Cash Equivalents and Short-Term Investments249.65M209.41M179.36M147.33M168.39M46.67M
Total Debt7.91M8.41M10.51M12.63M11.18M10.03M
Total Liabilities90.49M90.65M75.25M64.36M86.81M40.50M
Stockholders Equity500.39M485.60M429.62M397.18M386.13M84.38M
Cash Flow
Free Cash Flow102.72M63.18M34.53M-11.43M-916.00K20.77M
Operating Cash Flow103.12M63.63M68.83M19.87M19.49M35.62M
Investing Cash Flow-35.53M-36.76M-34.30M-34.56M-77.81M-15.14M
Financing Cash Flow-1.69M-207.00K-1.20M-37.28M213.49M-1.36M

Paymentus Holdings Technical Analysis

Technical Analysis Sentiment
Negative
Last Price31.04
Price Trends
50DMA
35.21
Negative
100DMA
31.60
Negative
200DMA
30.41
Positive
Market Momentum
MACD
-1.08
Positive
RSI
34.77
Neutral
STOCH
15.52
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PAY, the sentiment is Negative. The current price of 31.04 is below the 20-day moving average (MA) of 33.57, below the 50-day MA of 35.21, and above the 200-day MA of 30.41, indicating a neutral trend. The MACD of -1.08 indicates Positive momentum. The RSI at 34.77 is Neutral, neither overbought nor oversold. The STOCH value of 15.52 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
WNWNS
76
Outperform
$3.03B16.8321.21%-0.64%30.96%
73
Outperform
$3.65B15.695.59%2.33%11.31%-16.02%
71
Outperform
$1.44B419.500.63%20.97%
PAPAY
70
Neutral
$3.89B78.3610.80%47.78%74.61%
63
Neutral
$34.04B6.14-11.52%1.82%5.53%-18.79%
AIAI
60
Neutral
$3.46B-33.73%25.27%4.68%
53
Neutral
$798.03M39.11-0.04%3.50%95.90%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PAY
Paymentus Holdings
31.04
11.92
62.34%
WNS
WNS
65.38
11.46
21.25%
PSFE
Paysafe
13.45
-4.38
-24.57%
CNXC
Concentrix
57.16
-7.24
-11.24%
AI
C3ai
25.75
-4.15
-13.88%
FLYW
Flywire
11.83
-4.47
-27.42%

Paymentus Holdings Corporate Events

Executive/Board Changes
Paymentus Holdings Grants CEO 1.1 Million RSUs
Neutral
Jul 2, 2025

On July 2, 2025, Paymentus Holdings, Inc.’s Board of Directors approved a grant of 1,100,000 time-based restricted stock units (RSUs) to CEO Dushyant Sharma under the 2021 Equity Incentive Plan. This decision, made after consulting with compensation experts and reviewing market standards, aims to recognize Sharma’s contributions, align his compensation with industry peers, and retain his services by aligning his financial interests with those of the company’s stockholders. The RSUs will vest over four years, with specific conditions for immediate vesting in certain circumstances.

The most recent analyst rating on (PAY) stock is a Hold with a $26.00 price target. To see the full list of analyst forecasts on Paymentus Holdings stock, see the PAY Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Paymentus Holdings Holds 2025 Annual Stockholders Meeting
Neutral
Jun 6, 2025

On June 6, 2025, Paymentus Holdings, Inc. held its 2025 Annual Meeting of Stockholders, where two Class I Directors were elected to the Board of Directors until 2028, and PricewaterhouseCoopers LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2025. The meeting saw participation from approximately 98% of the combined voting power of the company’s Class A and Class B common stock, reflecting strong shareholder engagement and support for the company’s governance and financial oversight strategies.

The most recent analyst rating on (PAY) stock is a Hold with a $26.00 price target. To see the full list of analyst forecasts on Paymentus Holdings stock, see the PAY Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jun 28, 2025