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Investing.com - Raymond (NSE:RYMD) James upgraded Paymentus (NYSE:PAY) from Market Perform to Outperform and set a price target of $37.00. According to InvestingPro data, the company has demonstrated strong revenue growth of 48% over the last twelve months, with a healthy current ratio of 4.5x.
The upgrade comes after a significant decline in Paymentus stock, which has fallen 29% since its May 19 peak, while the Russell 2000 gained 6% during the same period. InvestingPro analysis indicates the stock is currently trading near its Fair Value, with multiple ProTips suggesting oversold conditions.
Raymond James attributes the underperformance not to fundamental issues but likely to share distributions by Accel-KKR, which freed up 16% of shares over recent months.
The investment firm expressed confidence that second-quarter and 2025 estimates will prove conservative, projecting potential mid-single digit contribution profit dollar and low-double digit adjusted EBITDA upside in its 2025 bull case.
Raymond James also highlighted Paymentus’s growth potential, citing its mid-single-digit market share in an expansive total addressable market, and projecting $230 million in adjusted EBITDA by 2027.
In other recent news, Paymentus Holdings Inc . reported significant financial growth for the first quarter of 2025, with revenue rising 48.9% year-over-year to $275.2 million and adjusted EBITDA increasing by 51.3% to $30 million. Despite these strong figures, the company’s stock saw a decline, attributed to investor concerns over future guidance and market conditions. Analysts noted that Paymentus did not meet certain market expectations, which may have influenced stock performance. The company has projected a full-year 2025 revenue between $1.075 billion and $1.090 billion, indicating a 24.2% year-over-year growth. Paymentus also anticipates a contribution profit of $363 million to $369 million and adjusted EBITDA of $118 million to $122 million. Analyst discussions highlighted the company’s strong cash flow, with a record free cash flow of $41.1 million for the quarter. The company remains optimistic about its growth prospects, supported by a robust pipeline and strategic client engagements across various industry verticals.
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