Why is Payoneer Stock Rising in Pre-Market Session?

Shares of Payoneer Global Inc. (NASDAQ: PAYO) soared 12.5% in Thursday’s extended trade and a further 16.7% at the time of writing. Perhaps, investors are rejoicing over better-than-expected Q1 results as both revenue and earnings surpassed Street’s estimates.

Payoneer is a financial services company that offers online money transfer, digital payment services and provides customers with working capital.

Payoneer delivered Q1 earnings of $0.06 per share, much better than the consensus estimate of a loss of $0.05 per share. The reported figure compares favorably with a loss of $0.16 per share in the last year’s quarter.

Also, revenue grew 36% year-over-year to $137 million and surpassed the analyst’s expectations of $124.6 million. The company reported a 58% jump in B2B AP/AR volumes, with Commercial Card growth going strong.

Q1 Volume increased 10% year-over-year to $14.6 billion. Further, transaction costs as a percentage of revenue decreased to 18.7% from 20.0% in the same quarter last year.

CEO of Payoneer, Scott Galit, said, “We plan to continue investing in our product and geographic expansion as we see tremendous untapped potential in developing markets globally. Our go-to-market investments are delivering strong results with new customer payback period globally of less than 12 months… Given our strong market position, financial performance, brand, momentum, and large market opportunities, I remain optimistic about our future.”

Guidance

For full-year 2022, Payoneer expects revenue to be in the range of $550 million to $560 million, compared with the Street’s expectations of $538.5 million. Transaction costs are projected to be 21.5% of revenue.

Stock Rating

Consensus among analysts is a Moderate Buy based on two Buys and one Hold. The Payoneer average price target stands at $6.17 and implies upside potential of 71.4% to current levels.

Hedge Fund Trading Activity

TipRanks’ Hedge Fund Trading Activity tool shows that confidence of hedge funds in Payoneer is currently Very Negative, as the cumulative change in holdings across all five hedge funds that were active in the last quarter was a decrease of 1.2 million shares.

Conclusion

The company delivered a solid performance in the first quarter. Also, Payoneer entering into new partnerships, with a view to further expand its business seems encouraging. Further, its interest income stands to benefit from the rise in interest rates. Nevertheless, the overall challenging operating environment may impact PAYO’s performance to some extent.

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