Paysafe (PSFE) AI Stock Analysis

• Market Cap: $815.24M
• Dividend Yield: N/A
• Average Volume (3M): 418.01K
• Price to Earnings (P/E): 39.1
• Beta (1Y): 1.56
• Revenue Growth: 3.50%
• EPS Growth: 95.90%
• Country: US
• Employees: 3,300
• Sector: Technology
• Sector Strength: 91
• Industry: Information Technology Services
• EPS (TTM): 0.34
• Shares Outstanding: 59,333,363
• 10 Day Avg. Volume: 421,972
• 30 Day Avg. Volume: 418,008
• PEG Ratio: 19.71
• Price to Book (P/B): 0.87
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.01
• Enterprise Value/Market Cap: 3.61
• Enterprise Value/Revenue: 0.44
• Enterprise Value/Gross Profit: 3.45
• Enterprise Value/Ebitda: 1.68
• 1Y Price Target: $15.88
• Price Target Upside: 15.83% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

• Rating: 56 Neutral
• Price Target: $14.00 ▲(2.12%Upside)

Paysafe's stock score is primarily influenced by its financial performance, characterized by steady revenue growth but high leverage. The technical analysis suggests mixed signals with potential short-term strength but longer-term caution. Valuation concerns are significant due to a negative P/E ratio. The earnings call provided some optimism with organic growth and new partnerships, though challenges remain. Balancing these factors results in a moderate overall stock score.

Positive Factors

Growth Potential

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 Levels

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

Financial Performance

Paysafe shares are down approximately 23% since Q1 results, likely due to concerns around the H2 acceleration embedded in FY guidance amidst an uncertain macro environment.

Volatility

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

Paysafe Business Overview & Revenue Model

Company Description

Paysafe 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 Money

Paysafe generates revenue through a diversified model primarily based on transaction fees, service charges, and subscription-based models. A significant portion of its income comes from fees charged for processing payments and transactions across its platform, including credit card and direct debit transactions. Additionally, Paysafe earns money through its digital wallet solutions like Skrill and Neteller, which offer convenient ways for users to store, send, and receive money online, often charging small fees for transactions and currency exchanges. The company also benefits from partnerships with businesses in high-growth sectors such as iGaming and digital marketplaces, where it provides tailored payment solutions. These partnerships help expand its market reach and drive transaction volume, further boosting its revenue.

Paysafe Financial Statement Overview

Summary

Paysafe demonstrates steady revenue growth and improved profitability over recent years. However, the company faces challenges with its high leverage, which could impact financial stability. Cash flow generation is adequate, though growth in free cash flow is limited. Overall, while Paysafe shows positive trends, it must manage its debt levels to ensure long-term financial health.

Income Statement

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

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

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.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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
EBITDA	429.58M	435.88M	-1.52B	241.28M	257.60M
Net Income	22.16M	-20.25M	-1.86B	-110.33M	-126.71M
Balance Sheet
Total Assets	4.81B	5.23B	5.96B	7.27B	7.41B
Cash, Cash Equivalents and Short-Term Investments	216.68M	202.32M	260.22M	313.44M	387.62M
Total Debt	2.41B	2.53B	2.68B	2.80B	3.31B
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: Positive
• Last Price: 13.71
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PSFE, the sentiment is Positive. The current price of 13.71 is above the 20-day moving average (MA) of 12.82, above the 50-day MA of 13.24, and below the 200-day MA of 17.41, indicating a neutral trend. The MACD of 0.16 indicates Negative momentum. The RSI at 60.32 is Neutral, neither overbought nor oversold. The STOCH value of 69.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PSFE.

Paysafe Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNXC	76 Outperform	$3.81B	16.61	5.59%	2.22%	11.31%	-16.02%
PAY	70 Neutral	$3.81B	77.00	10.80%	―	47.78%	74.61%
FLYW	67 Neutral	$1.48B	412.41	0.63%	―	20.97%	―
AI	60 Neutral	$3.68B	―	-33.73%	―	25.27%	4.68%
PSFE	56 Neutral	$815.24M	39.11	-0.04%	―	3.50%	95.90%
Sector *	50 Neutral	C$2.94B	1.84	-63.12%	2.59%	11.24%	-12.42%