Repay Tops 4Q Estimates; Street Sees Over 28% Upside

Shares of Repay Holdings were up 1.9% in Tuesday’s pre-market session after the leading payment solutions provider reported better-than-expected 4Q results.

Repay’s (RPAY) adjusted earnings of $0.17 per share beat analysts’ expectations of $0.11 but declined 15% year-over-year. However, gross profits and adjusted EBITDA spiked 23% and 29%, respectively, on a year-over-year basis.

4Q revenues increased 23% and stood at $41.4 million. Analysts were expecting revenues of $38.7 million. The company’s card payment volume increased 16% year-over-year to $4 billion.

For 2021, the company expects to generate revenues in the range of $178-$188 million, while analysts anticipate revenues of $185.5 million.

Repay’s CFO Tim Murphy said, “In 2021, we are increasing investments in sales, technology and our products to further accelerate growth and position us well for the significant digital shifts our industry is experiencing in electronic payments.” (See Repay Holdings stock analysis on TipRanks)

Following the results, BTIG analyst Mark Palmer maintained a Buy rating and a price target of $31 (37% upside potential) on the stock. In a note to investors, Palmer said, “We believe the company is well positioned to sustain its strong growth given the long runway afforded by the underpenetrated verticals it serves – management pegged its total addressable market at $4.7tn – and its ample dry powder for accretive acquisitions.”

Overall, consensus among analysts is a Moderate Buy based on 3 Buys and 1 Hold. The average analyst price target of $29 implies upside potential of 28% to current levels. Shares have gained over 29% over the past year.

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