Paysafe (NYSE:PSFE), a leading payments platform, delivered better-than-expected first-quarter financials. Moreover, Paysafe’s leadership maintained its full-year guidance. This boosted investors’ sentiment and pushed PSFE stock higher by 13% in after-hours trading.
In addition, the company’s management expects sales and portfolio optimization initiatives to support its top line and drive margins in 2024. Moreover, PSFE strengthened its balance sheet and lowered its debt during the quarter, which is positive. Further, it continued to invest in business and repurchased shares.
With this background, let’s delve into Paysafe’s quarterly performance.
Paysafe Exceeds the Street’s Forecast
Paysafe delivered revenue of $417.7 million, up 8% year-over-year. This reflects a 7% increase in its total payment volume. The company’s revenue exceeded the Street’s forecast of $408.2 million.
The Merchant Solutions segment saw 11% revenue growth, while the Digital Wallets division experienced a 5% increase. Paysafe attributed its strong performance to new client acquisitions in 2023, expanded sales capabilities, and advancements in product initiatives.
Paysafe’s adjusted earnings of $0.57 per share improved from $0.54 in the prior-year quarter and surpassed analysts’ average estimate of $0.55.
2024 Outlook
Paysafe reaffirmed its 2024 outlook and expects its revenue to be between $1,688 million and $1,712 million. This represents a year-over-year growth of 5.5% to 7%.
Moreover, the company projects adjusted EBITDA to be in the range of $473 to $488 million.
Is Paysafe a Good Stock to Buy?
Paysafe stock is up about 22.5% year-to-date. Its sales and portfolio optimization initiatives, improving take rate in the Merchant Solutions segment, and focus on deleveraging its balance sheet, along with investment in the business, supported its share price.
However, Wall Street is currently bearish on PSFE stock. It has one Hold and two Sell recommendations for a Moderate Sell consensus rating. These analysts’ average price target on PSFE stock is $13.87, implying 11.49% downside potential from current levels.
