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Investing.com - H.C. Wainwright has reiterated its Buy rating and $4.00 price target on Usio Inc. (NASDAQ:USIO) despite softer-than-expected first-quarter results. Currently trading at $1.40, the stock has significant upside potential according to analysts, with targets ranging from $4.00 to $7.00. InvestingPro data shows the company is currently undervalued based on its Fair Value analysis.
The financial technology company maintained its full-year revenue growth guidance of 14.0% to 16.0% during a recent H.C. Wainwright @Home event featuring Usio CEO Louis Hoch. The firm expects accelerated revenue growth to begin in the second half of 2025, driven by new and expanding Independent (LON:IOG) Software (ETR:SOWGn) Vendor (ISV) relationships. InvestingPro analysis reveals the company has maintained a healthy 23.3% gross profit margin and generated $3.05 million in levered free cash flow over the last twelve months.
Usio’s recently launched Usio ONE initiative, which rolled out in the first quarter, is expected to improve cross-selling opportunities across the company’s four complementary business lines. This strategic move aims to enhance revenue streams as the year progresses.
H.C. Wainwright highlighted Usio’s resilience during challenging economic environments, noting the company’s limited retail exposure and potential benefits from stimulus programs placed on Usio-issued debit cards. The firm also mentioned increased opportunities from the company’s Output Solutions business line during economic downturns.
USIO shares have declined 2.1% since May 16, compared to a 0.9% increase in the Russell 2000 Index during the same period. H.C. Wainwright recommends investors accumulate shares ahead of what it expects to be "meaningfully stronger financial results" beginning in the second half of 2025. With a market capitalization of $37.25 million and a P/E ratio of 11.8x, detailed valuation metrics and additional insights are available through InvestingPro’s comprehensive research report, which is part of its coverage of over 1,400 US stocks.
In other recent news, Usio Inc. reported its Q1 2025 earnings, revealing a mixed performance. The company achieved a revenue of $22 million, slightly exceeding the forecast of $21.8 million, marking a 5% year-over-year increase. However, Usio missed earnings per share (EPS) expectations, posting a loss of -$0.01 compared to the anticipated profit of $0.02. Despite the revenue beat, the EPS miss led to a notable market reaction, with Usio’s stock experiencing a decline post-announcement. The company projects a 14-16% revenue growth for the year, indicating confidence in its future performance.
Usio is focusing on innovation, notably with a new biometrics AI-driven application, and is exploring potential mergers and acquisitions to expand its market presence. The company’s total processing volume increased by 34%, and electronic transaction volumes rose by 36%, demonstrating strong operational growth. Additionally, Usio’s adjusted EBITDA improved to $700,000 from $500,000 in Q4 2024, and the company generated $700,000 in cash during the quarter. Analysts have noted the company’s ongoing challenges with profitability, despite the positive revenue trends.
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