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Usio Inc (USIO)
NASDAQ:USIO
US Market

Usio (USIO) AI Stock Analysis

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Usio

(NASDAQ:USIO)

Rating:72Outperform
Price Target:
$2.00
▲(27.39%Upside)
Usio's strong revenue growth and improved cash flow management are significant strengths, contributing to a solid financial performance score. The optimistic outlook from the earnings call and the stock's undervaluation further bolster the overall score. However, challenges in profitability at the EBIT level and slightly softer gross margins are areas to watch.
Positive Factors
Cross-Selling Initiative
The company's Usio ONE initiative is expected to drive improved cross-selling between the company's four complementary business lines.
Revenue Growth
Accelerating revenue growth is expected to begin in the second half of 2025, driven by new and expanding ISV relationships, providing a high level of revenue visibility.
Negative Factors
Financial Performance
USIO’s Q1/25 financial results included sales of $22 million and adjusted EBITDA of $666,248, which were less than expectations.
Prepaid Card Revenue
Prepaid Card revenue declined 13% for the quarter due to the loss of breakage revenues arising from the completion of a large prepaid card program.

Usio (USIO) vs. SPDR S&P 500 ETF (SPY)

Usio Business Overview & Revenue Model

Company DescriptionUsio, Inc., together with its subsidiaries, provides integrated electronic payment processing services to merchants and businesses in the United States. The company offers various types of automated clearing house (ACH) processing; and credit, prepaid card, and debit card-based processing services. Its ACH transaction processing services include Represented Check, a consumer non-sufficient funds check that is presented for payment electronically rather than through the paper check collection system; and Accounts Receivable Check Conversion, a consumer paper check payment that is converted into an e-check. The company also offers merchant account services for the processing of card-based transactions through the VISA, MasterCard, American Express, Discover, and JCB networks, including online terminal services accessed through a website or retail services accessed through a physical terminal. In addition, it provides a proprietary web-based customer service application that allows companies to process one-time and recurring payments through e-checks or credit cards; and an interactive voice response telephone system to companies, which accept payments directly from consumers over the telephone using e-checks or credit cards. Further, the company offers prepaid and incentive card issuance services; and operates a prepaid core processing platform, as well as provides additional services, such as electronic bill presentment, document composition, document decomposition, and printing and mailing services for various industry verticals, including utilities and financial institutions. It markets and sells ACH products and services primarily through resellers; and prepaid card program directly to government entities, corporations, and to consumers through the internet. The company was formerly known as Payment Data Systems, Inc. and changed its name to Usio, Inc. in June 2019. Usio, Inc. was incorporated in 1998 and is headquartered in San Antonio, Texas.
How the Company Makes MoneyUsio makes money primarily through transaction fees from its electronic payment processing services. These include fees charged to merchants for processing credit and debit card transactions, ACH payments, and issuing prepaid cards. Additionally, Usio earns revenue from providing value-added services such as data analytics and fraud prevention. The company also benefits from partnerships with financial institutions and businesses, allowing it to extend its reach and enhance service offerings. Revenue is further supported by subscription and usage-based fees for its platform services, contributing to Usio's overall earnings.

Usio Earnings Call Summary

Earnings Call Date:May 14, 2025
(Q1-2025)
|
% Change Since: 0.64%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Positive
The earnings call presented a mix of significant achievements, such as record revenues and strong growth in specific segments like PayFac and ACH. However, there were also challenges, including a slight decline in gross margins and the phasing out of previous revenue sources like the New York City COVID program. Despite these challenges, the overall tone was optimistic, with initiatives like Usio ONE expected to drive future growth.
Q1-2025 Updates
Positive Updates
Record First Quarter Revenues
Usio reported record numbers in first quarter revenues and a significant increase in processing volume. Total processing volume increased by 34%, with a 5% increase in revenues.
Strong Performance in PayFac
PayFac showed outstanding growth with total processing dollars up 17% and transactions processed up 65%. PayFac now accounts for approximately 59% of total card revenues.
Usio ONE Initiative Launch
The Usio ONE initiative was officially launched, aiming to integrate Usio's services across business units. Initial cross-selling efforts have begun, with some early wins reported.
Increase in ACH and Complementary Services
ACH revenues were up 33% with electronic transaction volumes up 36%. This marked the sixth consecutive quarter of growth in this segment.
Improved Cash Position
Usio's cash balance rose to $8.7 million at quarter end, generating $700,000 of cash in the quarter.
Negative Updates
Slight Decline in Gross Margins
Gross profits were little changed from a year ago, with margins somewhat softer due to the revenue mix.
Impact of New York City COVID Program Phase-Out
Revenues were slightly down in comparison to the prior year's quarter due to the previous year's $1 million from the New York City COVID program.
Company Guidance
During Usio's First Quarter Fiscal 2025 Earnings Conference Call, the company reported record revenues, a 34% increase in total processing volume, and a 36% growth in ACH processing volume. This growth contributed to a 5% rise in revenues, despite a dip in net income compared to the previous year. Gross profits remained relatively unchanged, though margins were somewhat softer due to the revenue mix. The company achieved a sequential improvement in profitability, with adjusted EBITDA increasing to $700,000 from $500,000 in the fourth quarter of 2024. Usio also generated $700,000 in cash, ending the quarter with $8.7 million in cash. The company's strategic initiatives, including the Usio ONE implementation, are expected to drive 14% to 16% top-line revenue growth this year, with a significant acceleration anticipated in the second half.

Usio Financial Statement Overview

Summary
Usio has shown strong revenue growth and improved cash flow management. The balance sheet is stable with low leverage, but challenges persist with profitability at the EBIT level.
Income Statement
70
Positive
Usio has shown a consistent revenue growth trajectory over recent years with a notable increase from $32.25M in 2020 to $83.97M in TTM. The gross profit margin improved to 22.65% in TTM, reflecting efficient cost management. However, the net profit margin remains a concern, though slightly positive at 3.95% in TTM, indicating a recent recovery from prior losses. EBIT margins are still negative, which suggests challenges in operating efficiency.
Balance Sheet
65
Positive
The balance sheet reflects a solid equity base with a positive equity ratio of 17.33% in TTM. The debt-to-equity ratio is low at 0.16, indicating prudent leverage management. However, the return on equity is modest at 17.49% in TTM, suggesting room for improvement in generating returns on shareholders' equity.
Cash Flow
75
Positive
Usio's cash flow from operations has rebounded significantly, with free cash flow growing to $5.93M in TTM from previous lows. The operating cash flow to net income ratio is healthy, indicating solid cash generation relative to net income. The company has effectively managed capital expenditures, leading to improved free cash flow.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue83.97M82.93M82.59M69.43M61.94M32.25M
Gross Profit19.02M19.61M18.60M14.59M15.63M7.38M
EBITDA2.40M3.00M1.90M-2.46M2.50M-2.24M
Net Income3.32M3.31M-475.10K-5.48M-321.63K-2.91M
Balance Sheet
Total Assets109.62M107.21M106.93M97.91M133.68M82.67M
Cash, Cash Equivalents and Short-Term Investments8.72M8.06M7.16M5.71M7.26M5.01M
Total Debt2.99M3.87M3.38M3.03M3.11M2.84M
Total Liabilities90.63M88.05M91.87M83.98M115.01M65.96M
Stockholders Equity18.99M19.16M15.07M13.93M18.67M16.70M
Cash Flow
Free Cash Flow5.93M1.90M14.08M-17.85M28.51M5.44M
Operating Cash Flow7.06M2.90M14.92M-17.04M29.78M6.29M
Investing Cash Flow-1.08M-944.38K-834.96K-812.24K-1.27M-6.76M
Financing Cash Flow-1.51M-5.14M6.06M-1.40M887.46K9.98M

Usio Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1.57
Price Trends
50DMA
1.48
Positive
100DMA
1.51
Positive
200DMA
1.55
Positive
Market Momentum
MACD
0.04
Negative
RSI
70.84
Negative
STOCH
77.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For USIO, the sentiment is Positive. The current price of 1.57 is above the 20-day moving average (MA) of 1.44, above the 50-day MA of 1.48, and above the 200-day MA of 1.55, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 70.84 is Negative, neither overbought nor oversold. The STOCH value of 77.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for USIO.

Usio Risk Analysis

Usio disclosed 41 risk factors in its most recent earnings report. Usio 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

Usio Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
$43.10M13.3319.38%3.07%
PAPAY
66
Neutral
$3.89B78.3610.80%47.78%74.61%
63
Neutral
$34.07B6.13-11.73%1.80%5.33%-18.31%
53
Neutral
$798.03M39.11-0.04%3.50%95.90%
50
Neutral
$25.61M-1.97%5.81%55.03%
WYWYY
49
Neutral
$33.35M-14.76%24.03%49.96%
49
Neutral
$118.66M14.84-44.27%-13.18%4.83%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
USIO
Usio
1.57
0.08
5.37%
WYY
Widepoint
3.26
-0.90
-21.63%
CLPS
Clps
0.92
0.12
15.00%
PSFE
Paysafe
13.34
-4.49
-25.18%
NOTE
FiscalNote Holdings
0.75
-1.04
-58.10%
PAY
Paymentus Holdings
30.91
11.79
61.66%

Usio Corporate Events

Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
Usio’s Annual Meeting Approves Key Proposals
Neutral
Jun 11, 2025

On June 10, 2025, Usio held its Annual Meeting of Stockholders, where several key proposals were voted on. Elizabeth Michelle Miller was elected as a Class II director, and the stockholders approved the executive compensation for 2024, the 2025 Comprehensive Equity Incentive Plan, and the appointment of PKF of Texas, P.C. as the independent registered public accounting firm for 2025. These decisions reflect the company’s ongoing governance and strategic planning efforts.

The most recent analyst rating on (USIO) stock is a Buy with a $6.00 price target. To see the full list of analyst forecasts on Usio stock, see the USIO 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: Jul 03, 2025