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On Tuesday, Nayax (NASDAQ:TASE:NYAX) stock received a positive outlook from B.Riley, as the firm initiated coverage with a Buy rating and set a price target of $38.00 per share.
The fintech company, known for its cashless payment solutions and management software aimed at self-service retail, was recognized for its rapid growth and extensive global reach.
Nayax's offerings include point-of-sale (POS) hardware devices, payment processing systems, and software-as-a-service (SaaS) solutions. These products are designed to enhance consumer engagement and sales through cashless payments, digital advertising, and customer loyalty programs. The company operates an international platform with a presence in over 120 countries and has achieved an impressive net retention rate of 130%.
The firm's valuation of Nayax is based on a 14x 2026 estimated EV/EBITDA multiple. Nayax's business model, which emphasizes recurring SaaS and payment processing fees, contributes to 72% of its sales. The company serves 91,000 customers with more than 1.2 million active devices, handling over $5 billion in annual transaction volume.
The analyst from B.Riley highlighted Nayax's diverse and growing base of higher-margin recurring revenue, which is expected to support a rapid increase in profitability. Furthermore, Nayax is anticipated to transition to generating sustainable positive free cash flow (FCF) within the current year. This financial milestone would mark a significant achievement for the company as it continues to expand its market presence.
In other recent news, Nayax Ltd. has seen significant developments. The company has promoted Keren Sharir to the role of President, in addition to her current position as Chief Marketing Officer. Sharir's new responsibilities include aligning business operations, building policies, and increasing efficiency across departments.
In other recent developments, Nayax has launched Nayax EV CloudPay, a cloud-based payment system for electric vehicle charging stations. This system supports over 80 digital and cashless payment methods, aiming to reduce inefficiencies in the EV charging payment infrastructure.
Analysts from firms including Keefe, Bruyette & Woods, Barclays (LON:BARC), and UBS have initiated coverage of Nayax, giving it ratings of Market Perform, Equal Weight, and Neutral respectively.
Further, Nayax has announced a partnership with DKV Mobility to expand payment options in Europe, set to begin in the second half of 2024. The company has also acquired Roseman Engineering Company Ltd., a key player in fuel and EV management solutions, for approximately $5.7 million.
These developments underscore Nayax's ongoing efforts to enhance commerce and payment solutions, particularly in the growing electric vehicle sector.
InvestingPro Insights
Nayax's recent performance aligns with B.Riley's optimistic outlook. According to InvestingPro data, the company has shown strong growth with a 32.68% increase in revenue over the last twelve months as of Q3 2023, and an even more impressive 37.59% quarterly revenue growth in Q3 2023. This robust growth trajectory supports the analyst's positive view on the company's future prospects.
InvestingPro Tips highlight that Nayax operates with a moderate level of debt, which could provide financial flexibility as it aims to achieve sustainable positive free cash flow this year. Additionally, the company's stock has seen a significant return over the last week, with a 10.37% price increase, and is currently trading near its 52-week high at 93.42% of that level. These indicators suggest growing investor confidence in Nayax's business model and growth potential.
While the company is not yet profitable over the last twelve months, analysts predict that Nayax will be profitable this year, aligning with B.Riley's expectations for increasing profitability. For investors seeking more comprehensive analysis, InvestingPro offers 5 additional tips that could provide further insights into Nayax's financial health and market position.
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