Nayax stock holds as Keefe reiterates Market Perform rating

On Wednesday, Keefe, Bruyette & Woods maintained their Market Perform rating on Nayax (TASE:NYAX) (NASDAQ:NYAX) with a steady price target of $33.00. The decision came after the company reported earnings per share (EPS) of $0.05, which fell short of Keefe’s anticipated $0.08 but surpassed the consensus estimate of $0.03.

The variance from Keefe’s expectations was attributed to a combination of lower-than-expected revenue expenses, which impacted earnings by negative $0.10 per share, along with higher tax expenses reducing earnings by $0.01 per share, and increased finance expenses costing an additional $0.03 per share. These negative factors were partially balanced by a reduction in the cost of revenues, adding $0.04 per share, and a decrease in other expenses, contributing $0.06 per share to earnings.

Despite the EPS miss, Nayax’s Adjusted EBITDA of $12.8 million exceeded Keefe’s estimate of $10.2 million. While the company is currently trading at a high EV/EBITDA multiple of 49.5x, InvestingPro analysis indicates strong revenue growth of 33.3% in the last twelve months. The financial firm’s analysis highlighted that Nayax’s financial performance was bolstered by lower expenses, which played a significant role in the Adjusted EBITDA beat.

The report from Keefe, Bruyette & Woods emphasized the impact of Nayax’s expense management on its financial outcomes. The company’s ability to control costs was a key factor in achieving a stronger Adjusted EBITDA than projected.

Keefe’s commentary on Nayax’s outlook was optimistic, citing mergers and acquisitions (M&A) as positive contributors to the company’s future. This perspective suggests that strategic corporate actions could enhance Nayax’s growth and financial health moving forward.

In conclusion, Keefe, Bruyette & Woods reaffirmed their Market Perform rating on Nayax shares, with a consistent price target of $33.00, based on the company’s recent financial results and potential for improvement through M&A activities.

In other recent news, Nayax Ltd reported its fourth-quarter 2024 earnings, revealing a notable miss on earnings per share (EPS) expectations. The company posted an EPS of -0.16, falling short of the forecasted 0.03, while revenue for the quarter was $89 million, below the anticipated $91.84 million. Despite these results, Nayax showed a robust year-over-year performance for the full year 2024, with revenue increasing by 33% to $314 million. The company’s recurring revenue surged by 47%, now accounting for 71% of total revenue, and its adjusted EBITDA quadrupled to $35.5 million. Looking ahead, Nayax has set ambitious revenue guidance for 2025, projecting growth of 30-35% to reach between $410 million and $425 million. The company also aims to achieve a 50% gross margin and a 30% adjusted EBITDA margin by 2028, focusing on organic growth and strategic mergers and acquisitions. In terms of analyst activity, Nayax’s stock performance and company outlook were not specifically addressed by any upgrades or downgrades from analysts in the recent period. These developments highlight Nayax’s strategic direction and operational performance in the context of its financial results.

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