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Payoneer (PAYO)
NASDAQ:PAYO
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Payoneer
(NASDAQ:PAYO)
74Outperform
Positive Factors
Earnings
Payoneer's 4Q24 revenue and adjusted EBITDA both exceeded consensus estimates, indicating strong financial performance.
Financial Performance
Payoneer has continued to derive significant revenue from interest income on customer balances, which increased to $7 billion, up 9% year-over-year.
Market Performance
Payoneer shares have seen significant growth, up 110% over the last twelve months, indicating strong market performance.
Negative Factors
Profitability
Profitability growth may moderate in a falling rate environment, with a potential 5% decline in EBITDA in 2025.
Valuation
The valuation is seen as fairly valued at nearly 20x SBC-expensed EBITDA, indicating limited potential for further multiple expansion.
Volume Growth
Investor concerns about the pace of volume growth in key verticals B2B and ecommerce marketplaces contributed to the pullback in Payoneer's share price.
Payoneer (PAYO) vs. S&P 500 (SPY)
Market Cap
$2.31B
Dividend YieldN/A
Average Volume (3M)3.78M
Price to Earnings (P/E)19.8
Beta (1Y)1.29
Revenue Growth17.64%
EPS Growth30.75%
CountryUS
Employees2,407
SectorTechnology
Sector Strength45
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.32
Shares Outstanding362,593,480
10 Day Avg. Volume4,828,501
30 Day Avg. Volume3,777,146
Financial Highlights & Ratios
PEG Ratio0.64
Price to Book (P/B)N/A
Price to Sales (P/S)2.75
Price to Cash Flow (P/CF)14.60
P/FCF Ratio22.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$12.36Price Target Upside94.34% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Payoneer Business Overview & Revenue Model
Company DescriptionPayoneer Inc. is a leading financial services company specializing in digital payment and cross-border transaction solutions. Operating in the financial technology sector, Payoneer provides a platform that empowers businesses, online sellers, and freelancers to receive payments from international clients efficiently. The company's core products and services include cross-border payment processing, working capital solutions, and a multi-currency account that allows users to hold and transfer funds in various currencies.
How the Company Makes MoneyPayoneer generates revenue primarily through transaction fees, which are charged on cross-border payments and currency conversions. The company earns money by charging a percentage of the transaction value when users receive funds from their clients. Additionally, Payoneer offers value-added services such as working capital solutions and prepaid cards, which also contribute to its revenue streams. The company has established partnerships with major e-commerce platforms and marketplaces, enhancing its ability to capture a significant market share in the global payments industry.
Payoneer Financial Statement Overview
Summary
Payoneer demonstrates strong financial health, with impressive revenue growth, improved profitability, and robust cash flow generation. The balance sheet is solid with zero debt, but the low equity ratio could be a risk.Income Statement
Payoneer has exhibited strong revenue growth with a CAGR of approximately 24% over the past five years. The gross profit margin consistently remains high at 100%, indicating effective cost control. The net profit margin has improved to 12.39% in 2024 from losses in prior years, reflecting a solid turnaround in profitability. Additionally, EBIT and EBITDA margins have shown significant improvement, signaling enhanced operational efficiency.85
Very Positive
Balance Sheet
The company maintains a robust balance sheet with zero total debt in 2024, showcasing financial prudence. The debt-to-equity ratio is favorable at 0, and the equity ratio is 9.14%, reflecting a strong equity position. Return on equity has increased to 16.72% in 2024, which is commendable. However, the relatively low equity ratio may be a potential risk factor.78
Positive
Cash Flow
Payoneer's cash flow performance is strong, with a notable free cash flow growth rate of 51% in 2024. The operating cash flow to net income ratio is 1.46, suggesting efficient cash conversion from earnings. The free cash flow to net income ratio of 1.39 further strengthens the company's cash generation capability. The company also has a healthy level of cash and cash equivalents, ensuring liquidity.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 977.72M | 831.10M | 627.62M | 473.40M | 345.59M |
| Gross Profit | ||||
| 977.72M | 708.81M | 517.46M | 371.93M | 248.55M |
| EBIT | ||||
| 149.03M | 103.61M | -22.21M | -30.21M | -17.30M |
| EBITDA | ||||
| 196.33M | 131.42M | -8.23M | -7.14M | 1.20M |
| Net Income Common Stockholders | ||||
| 121.16M | 93.33M | -11.97M | -33.95M | -23.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 6.94B | 617.02M | 543.30M | 465.93M | 102.99M |
| Total Assets | ||||
| 7.93B | 7.28B | 6.59B | 5.08B | 3.67B |
| Total Debt | ||||
| 21.38M | 43.42M | 24.50M | 13.66M | 40.02M |
| Net Debt | ||||
| -476.09M | -573.60M | -518.80M | -452.26M | -62.96M |
| Total Liabilities | ||||
| 7.21B | 6.62B | 6.05B | 4.59B | 3.65B |
| Stockholders Equity | ||||
| 724.79M | 664.27M | 545.26M | 487.07M | 24.30M |
| Cash Flow | Free Cash Flow | |||
| 168.74M | 111.70M | 55.13M | -1.32M | -4.51M |
| Operating Cash Flow | ||||
| 176.93M | 159.49M | 83.96M | 19.58M | 9.53M |
| Investing Cash Flow | ||||
| -1.96B | -44.25M | 5.73M | 10.16M | -66.85M |
| Financing Cash Flow | ||||
| 427.77M | 511.95M | 1.46B | 1.40B | 1.67B |
Payoneer Technical Analysis
Negative
6.36
Price Trends
8.10
Negative
9.26
Negative
8.33
Negative
Market Momentum
-0.48
Negative
36.85
Neutral
60.44
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PAYO, the sentiment is Negative. The current price of 6.36 is below the 20-day moving average (MA) of 6.87, below the 50-day MA of 8.10, and below the 200-day MA of 8.33, indicating a bearish trend. The MACD of -0.48 indicates Negative momentum. The RSI at 36.85 is Neutral, neither overbought nor oversold. The STOCH value of 60.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PAYO.
Payoneer Risk Analysis
Payoneer disclosed 41 risk factors in its most recent earnings report. Payoneer 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
Payoneer Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $2.81B | 6.87 | 15.39% | ― | 8.26% | 20.41% | |
74 Outperform | $2.31B | 19.77 | 17.45% | ― | 17.64% | 30.75% | |
74 Outperform | $2.48B | 19.26 | 26.10% | ― | 33.84% | 0.29% | |
73 Outperform | $2.55B | ― | -11.98% | ― | 26.06% | 38.19% | |
61 Neutral | $1.93B | 81.10 | 2.34% | ― | -25.02% | ― | |
58 Neutral | $10.03B | 10.00 | -6.85% | 3.09% | 7.49% | -11.58% | |
55 Neutral | $861.19M | 40.78 | 2.51% | ― | 6.48% | ― |
* Technology Sector Average
Performance Comparison
PAYO
Payoneer
6.15
1.21
24.49%
PAGS
Pagseguro Digital
8.47
-3.32
-28.16%
PSFE
Paysafe
13.80
-0.64
-4.43%
ALKT
Alkami Technology
24.00
0.02
0.08%
MQ
Marqeta
3.76
-1.67
-30.76%
DLO
DLocal
8.69
-5.70
-39.61%
Payoneer Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -37.52% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
Payoneer had a record-breaking year with strong revenue and volume growth, particularly in their B2B and card usage segments. The company successfully launched new products and completed a strategic acquisition, contributing to their positive performance. However, challenges such as a decreased take rate, increased operating expenses, and the impact of declining interest rates were noted. Despite these lowlights, the highlights significantly outweigh them, indicating strong execution and growth potential.Highlights
Record-Breaking Revenue and Growth
Payoneer delivered volume growth of 21%, revenue growth excluding interest income of 20%, and generated $271 million of adjusted EBITDA, representing a 28% adjusted EBITDA margin for 2024.
Strong B2B Performance
B2B volume grew 42% year-over-year, significantly outpacing initial targets and 2023 performance. The B2B segment continues to show strong product market fit with service-oriented SMBs.
Card Usage Growth
Card usage grew 36% year-over-year with broad-based growth across all regions, reflecting strong customer adoption.
Successful New Product Launches
Key product launches included the lite account, ERP integrations, and the Green Channel portal in China, enhancing customer access to global demand.
Strategic Acquisition
Payoneer expanded its financial stack with the acquisition of Skuad, positioning the company to capture share in global workforce management.
Positive Adjusted EBITDA
Three consecutive quarters of positive adjusted EBITDA excluding interest income, with the full year achieving $14 million of positive adjusted EBITDA excluding interest income versus a loss in 2023.
Share Repurchase Program
Payoneer repurchased a total of $137 million worth of shares in 2024, exceeding their target of doubling share repurchases compared to 2023.
Lowlights
Decreased Take Rate
Q4 take rate of 116 basis points decreased 2 basis points year-over-year and 6 basis points sequentially, primarily driven by lower interest income.
Increased Operating Expenses
Total operating expenses of $233 million increased 17%, driven by labor-related expenses, higher transaction costs, consultancy fees, and seasonal cashback incentive programs.
Impact of Declining Interest Rates
Interest income expected to decline in 2025, impacting transaction costs as a percentage of revenue, projected to rise to approximately 18%.
Company Guidance
During Payoneer's Fourth Quarter 2024 Earnings Conference Call, the company provided robust guidance for 2025, forecasting revenue between $1,040 million and $1,050 million, which includes $215 million of interest income and $825 million to $835 million of revenue excluding interest income. This represents a 15% growth in revenue excluding interest income. The company expects adjusted EBITDA to be between $255 million and $265 million, reflecting a 25% adjusted EBITDA margin, with core adjusted EBITDA projected to more than triple to between $40 million and $50 million, showcasing increasing profitability. Payoneer anticipates transaction costs to rise to approximately 18% of revenue due to increased growth in its B2B and card offerings. The company aims to sustain growth by enhancing its ICP strategy, improving cross-sell, retention, and pricing, and expanding its platform through modernization and strategic acquisitions, such as its recent acquisition in China, which is expected to close in the first half of the year.Payoneer Corporate Events
Executive/Board Changes
Payoneer Expands Board with New Director Appointment
Positive
Feb 24, 2025
On February 19, 2025, Payoneer’s Board of Directors expanded from nine to ten members, appointing Barak Eilam as a Class I director. Eilam, with nearly three decades of experience in technology businesses, is expected to bring valuable insights to the company, enhancing its efforts to drive shareholder value and build a global financial stack for businesses worldwide.
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.