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On Tuesday, Paysign Inc. (NASDAQ:PAYS), currently trading at $2.46 and near its 52-week low of $2.25, retained its Buy rating and $6.00 price target from DA Davidson, following the announcement of an acquisition aimed at enhancing its plasma donor and pharmaceutical patient engagement technologies. According to InvestingPro data, analyst targets range from $6.00 to $7.25, suggesting significant upside potential despite recent price weakness. Paysign acquired Gamma Innovation LLC and has brought on board Michael Ngo, Gamma’s former Managing Member, as its new Chief Innovation Officer. Gamma’s portfolio includes a donor engagement application, a customer resource management platform designed for the blood and plasma collection industry, and other management solutions.
Paysign concluded the third quarter of 2024 with a strong financial position, boasting $10.3 million in unrestricted cash and $100.2 million in restricted cash, with no debt on its books. InvestingPro analysis indicates the company maintains a GOOD overall financial health score, with particularly strong growth metrics and impressive revenue growth of 27.75% over the last twelve months. The company is set to report its fourth-quarter results after market close today, with a conference call scheduled for 5pm ET. Analysts anticipate that Paysign will either meet or slightly surpass the quarter’s forecasts. During the third quarter results announcement, management confirmed their 2024 financial guidance, which projected a 20%-24% year-over-year increase in total revenue to between $56.5 million and $58.5 million, and a 34%-49% rise in adjusted EBITDA to $9 million to $10 million.
The guidance for the full year also indicated that adjusted EBITDA margins are expected to grow by 170 to 190 basis points year-over-year, reaching 15.9%-17.1%. Along with the fourth-quarter results, it is anticipated that management will present their guidance for 2025. DA Davidson forecasts an 11% year-over-year growth in total revenue to $64.7 million for 2025, with an 18% increase in adjusted EBITDA to $11.3 million. After witnessing a significant recovery in revenue per center in the three years post-pandemic, analysts expect a moderate growth in the Plasma segment for 2025. The Pharma segment, however, could exceed expectations due to its recent positive performance.
The $6.00 price target set by DA Davidson reflects an enterprise value of 25 times the firm’s projected 2026 adjusted EBITDA of $13.2 million. This valuation underscores the firm’s confidence in Paysign’s growth trajectory and its strategic initiatives, such as the recent acquisition of Gamma Innovation. For deeper insights into Paysign’s valuation and growth potential, InvestingPro subscribers can access comprehensive financial analysis, including detailed Fair Value estimates and over 30 additional key metrics not covered in this article.
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