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Paysafe (PSFE)
NYSE:PSFE
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Paysafe
(NYSE:PSFE)
Rating:61Neutral
Price Target:
$15.50
▲(7.64% Upside)
Positive Factors
Revenue Growth
The consistent organic revenue growth and improved EBITDA highlight Paysafe's ability to expand its market presence and improve operational efficiency, suggesting a strong foundation for future growth.
Product Innovations
The launch of new products like the PagoEfectivo wallet demonstrates Paysafe's commitment to innovation and market expansion, potentially increasing customer engagement and revenue streams.
Partnerships Expansion
Expanding partnerships with major financial institutions enhances Paysafe's competitive edge, providing access to broader markets and reinforcing its position in the digital payment solutions industry.
Negative Factors
High Leverage
High leverage levels pose a risk to Paysafe's financial stability, potentially limiting its ability to invest in growth opportunities and increasing vulnerability to economic downturns.
Gross Margin Decline
A decline in gross margin indicates potential challenges in maintaining profitability, which could impact long-term financial health if not addressed through cost management or revenue enhancement strategies.
Revenue Decline
The decline in revenue highlights potential vulnerabilities in Paysafe's business model, suggesting the need for strategic adjustments to mitigate external impacts and sustain growth.
Paysafe (PSFE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$820.32M
Dividend YieldN/A
Average Volume (3M)362.58K
Price to Earnings (P/E)39.1
Beta (1Y)1.65
Revenue Growth0.47%
EPS Growth-292.07%
CountryUS
Employees3,300
SectorTechnology
Sector Strength86
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.46
Shares Outstanding58,846,733
10 Day Avg. Volume281,875
30 Day Avg. Volume362,580
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap3.75
Enterprise Value/Revenue1.81
Enterprise Value/Gross Profit3.61
Enterprise Value/Ebitda7.17
Forecast
1Y Price Target
$16.76Price Target Upside16.39% Upside
Rating ConsensusHold
Number of Analyst Covering5
Paysafe Business Overview & Revenue Model
Company DescriptionPaysafe 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 MoneyPaysafe 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 Earnings Call Summary
Earnings Call Date:Aug 12, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted Paysafe's strong organic revenue growth and strategic progress in product innovations and partnerships, signaling positive momentum. However, challenges such as revenue decline, gross margin reduction, and increased leverage present risks. The company is confident about future growth driven by its sales pipeline and product initiatives, yet attrition rates and tax implications remain areas of concern.Q2-2025 Updates
Positive Updates
Strong Organic Revenue Growth
Paysafe achieved 5% organic revenue growth and 12% adjusted EBITDA growth when excluding the divested direct marketing business. This reflects continued execution on strategic priorities and growth across all major product lines.
Share Repurchase and Undervaluation
Returned $20 million to shareholders by repurchasing nearly 1.5 million shares, up from 613,000 in Q1. The company continues to repurchase shares as they believe shares are significantly undervalued.
Product Innovations
Successful launch of the PagoEfectivo wallet in Peru with nearly 40,000 sign-ups, and a strong volume of repeat users. The Skrill digital wallet evolved with new features enhancing user engagement.
E-commerce Growth
E-commerce growth exceeded 30% in the second quarter, with strong performance in iGaming and other verticals. Europe saw double-digit regional growth for the first time in years.
Partnerships Expansion
Signed BBVA, a major Spanish bank, and expanded partnerships with Fiserv, Revolut, and Deutsche Bank for seamless cash transactions and digital solutions.
Negative Updates
Revenue Decline
Reported revenue declined by 3% to $428.2 million, impacted by divestiture, foreign exchange, and interest.
Gross Margin Decline
Gross margin declined 160 basis points due to lower interest revenue and business mix changes.
Net Loss and Tax Valuation Allowance
GAAP net loss of $50 million included a $31 million valuation allowance on U.K. deferred tax assets, with potential U.S. tax implications affecting future valuation allowances.
Higher Attrition Rates
Revenue attrition was 12% for the first half, higher than expected, though there is slight improvement from Q1 to Q2.
Leverage Increase
Net leverage increased to 5.4x due to stronger euro impact and divestiture effects, though expected to improve in the back half of the year.
Company Guidance
During the Paysafe Second Quarter 2025 Earnings Conference Call, the company provided detailed guidance reflecting its strategic growth and financial performance. Paysafe reported a 5% organic revenue growth and a 12% increase in adjusted EBITDA, excluding the divested direct marketing business. The company emphasized its continued execution on strategic priorities, showcasing growth across all major product lines and new customer wins. In Q2, Paysafe repurchased 1.5 million shares, returning $20 million to shareholders, and planned further buybacks in Q3, citing undervaluation of their stock. The company anticipated accelerating top-line growth in the second half, with enterprise-level deals and annual contract values up over 20% year-to-date. Paysafe expects organic growth in the second half to range between 8% to 10%, driven by existing customer growth, new customer acquisitions, and new product initiatives. The company also highlighted the successful launch of its PagoEfectivo wallet in Peru, with nearly 40,000 sign-ups, and sustained growth in its e-commerce segment, which saw over 30% growth in Q2. Paysafe reaffirmed its 2025 outlook, expecting stronger growth and margin improvement supported by operational momentum and strategic initiatives.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.65
Positive
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.55
Neutral
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.60
Neutral
| 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
Positive
14.40
Price Trends
13.35
Positive
13.37
Positive
15.59
Negative
Market Momentum
0.30
Negative
57.70
Neutral
56.89
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 14.4 is above the 20-day moving average (MA) of 13.88, above the 50-day MA of 13.35, and below the 200-day MA of 15.59, indicating a neutral trend. The MACD of 0.30 indicates Negative momentum. The RSI at 57.70 is Neutral, neither overbought nor oversold. The STOCH value of 56.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PSFE.
Paysafe Risk Analysis
Paysafe disclosed 49 risk factors in its most recent earnings report. Paysafe 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 1 New Risks
1.
We rely on our operating subsidiaries to provide us with funds necessary to meet our financial obligations and our ability to pay dividends may be constrained. Q4, 2024
Paysafe Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $1.68B | 334.31 | 0.86% | ― | 22.20% | ― | |
71 Outperform | $3.25B | 14.18 | 5.59% | 2.46% | 11.31% | -16.02% | |
71 Outperform | $4.41B | 80.57 | 11.59% | ― | 49.35% | 72.05% | |
61 Neutral | $36.70B | 12.21 | -10.39% | 1.84% | 8.50% | -7.32% | |
61 Neutral | $820.32M | 39.11 | -5.88% | ― | 0.47% | -292.07% | |
43 Neutral | $2.15B | ― | -40.94% | ― | 14.34% | -13.27% |
* Technology Sector Average
Performance Comparison
PSFE
Paysafe
14.40
-8.27
-36.48%
CNXC
Concentrix
54.01
-11.89
-18.04%
AI
C3ai
16.40
-6.60
-28.70%
FLYW
Flywire
13.74
-4.05
-22.77%
PAY
Paymentus Holdings
32.90
11.55
54.10%
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.