Two 59%+ winners, four above 25% in Aug – How this AI model keeps picking winners
On Wednesday, RBC Capital Markets analyst Daniel Perlin adjusted the price target for Paysafe stock, listed on the New York Stock Exchange under the ticker (NYSE:PSFE), to $19.00 from the previous $21.00, while keeping a Sector Perform rating on the company’s shares. According to InvestingPro data, the stock has experienced significant volatility, declining nearly 20% in the past week and trading at $15.65, well below its 52-week high of $26.25. The revision comes as Paysafe continues to refine its merchant portfolio and completes the sale of its direct marketing business, which Perlin notes may introduce some "optical noise" into the financial year 2025 (FY25) but also shows signs that the company’s transformation is gaining traction. Despite recent challenges, InvestingPro analysis suggests the company is significantly undervalued, with a Financial Health Score of 2.43 (FAIR) and strong fundamentals including $1.7 billion in revenue and $408.9 million in EBITDA over the last twelve months.
Perlin highlighted that management has confirmed receiving unsolicited takeover interest, prompting the Board, along with financial and legal advisors, to review all potential proposals. This development indicates a strategic corporate interest in Paysafe, although the outcomes of such reviews are yet to be determined. The company currently trades at an EV/EBITDA multiple of 7.68x, which could be attractive to potential acquirers. Discover more detailed valuation metrics and 12 additional ProTips with a subscription to InvestingPro, including comprehensive analysis in the Pro Research Report.
In response to the company’s recent results and guidance, RBC Capital has revised its estimates for Paysafe’s FY25 revenue and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) to $1.712 billion and $466 million, down from the previously projected $1.825 billion and $540 million, respectively. Furthermore, RBC Capital has set forth its FY26 revenue and adjusted EBITDA estimates at $1.814 billion and $520 million.
The reduction in the price target to $19 is a result of rolling the valuation forward to the fiscal year 2026 estimates (FY26e) and is based on 6.5 times the FY26e enterprise value/EBITDA ratio. Perlin attributes this adjustment to the combination of Paysafe’s stronger go-to-market performance, driven by increased investments and strategic initiatives aimed at enhancing value-added services, and the temporary challenges associated with derisking the company’s portfolio.
In other recent news, Paysafe Ltd reported its Q4 2024 earnings, which fell short of market expectations. The company’s earnings per share (EPS) came in at $0.48, missing the anticipated $0.72, while revenue was reported at $420.1 million, below the forecasted $437.42 million. Despite these quarterly setbacks, Paysafe achieved a 6% increase in full-year revenue, reaching $1.7 billion, and recorded its first positive GAAP net income of $22 million. Additionally, the company announced the divestiture of its direct marketing payment processing business as part of its portfolio rationalization efforts. Looking ahead, Paysafe has provided guidance for 2025, expecting revenue growth between flat and 2%, with projected earnings per share ranging from $2.21 to $2.51. Analyst firms did not provide any new upgrades or downgrades following the earnings release. The company plans to focus on growing its e-commerce and digital wallet segments, which showed strong performance despite the overall earnings miss.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.