FlexShopper (FPAY) AI Stock Analysis

• Market Cap: $25.65M
• Dividend Yield: N/A
• Average Volume (3M): 66.13K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.67
• Revenue Growth: 24.46%
• EPS Growth: -2805.36%
• Country: US
• Employees: 204
• Sector: Industrials
• Sector Strength: 68
• Industry: Rental & Leasing Services
• EPS (TTM): -0.16
• Shares Outstanding: 21,461,489
• 10 Day Avg. Volume: 69,134
• 30 Day Avg. Volume: 66,132
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.21
• Price to Cash Flow (P/CF): -0.90
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $2.50
• Price Target Upside: 104.92% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

FlexShopper's score reflects a mix of strengths and challenges. Strong revenue growth and strategic B2B expansion are notable positives. However, high leverage, low profitability, and weak technical indicators present significant risks. Recent corporate events and earnings call analysis provide optimism for future strategic shifts.

Positive Factors

Financial Performance

FlexShopper, Inc. announced financial results exceeding 2023 levels, driven by successes within both B2B and B2C channels.

Growth Strategy

The new strategy offers third-party financing to a broader range of customers, driving business growth.

Market Valuation

FPAY shares are currently trading at a meaningful discount to peers, with expected revenue and EBITDA growth to outpace peers in 2024 and 2025.

Revenue Growth

The company has seen a 15.0% increase in gross leasing revenue and a 25.0% increase in net lease revenue, with a reduction in bad debt expense as a percentage of revenue.

Negative Factors

Future Expansion Challenges

The company is expected to make significant progress in growing its B2B offering in 2025, expanding the signed store count by 250.0%.

Preferred Stock Redemption

The rights offering, which will be used to redeem 91.0% of Series 2 Preferred Stock, at a substantial discount, is expected to be accretive to earnings and simplify the capital structure.

FlexShopper Business Overview & Revenue Model

Company Description

FlexShopper, Inc. (FPAY) is a financial technology company operating in the United States, primarily within the sectors of consumer finance and retail. The company specializes in providing lease-to-own (LTO) solutions for consumers, offering a wide range of products including electronics, furniture, and appliances. FlexShopper operates an online marketplace where customers can shop for items with flexible payment options, aimed at consumers who may not have access to traditional credit.

How the Company Makes Money

FlexShopper makes money through its lease-to-own model, where customers lease products over a specified term while making weekly payments. The company earns revenue from these lease payments, which include both the cost of the product and a lease service fee. FlexShopper also collects additional fees from customers who opt to purchase the leased item before the end of the lease term. The company partners with various retailers to offer their products through its platform, expanding its inventory and customer reach. Key revenue streams include lease income, early purchase option fees, and potential partnerships with retailers and manufacturers that extend their customer base and product offerings.

FlexShopper Financial Statement Overview

Summary

FlexShopper shows revenue and operational growth, but profitability and cash flow remain challenging due to high leverage and low equity returns.

Income Statement

FlexShopper's revenue has shown a positive trend with a substantial increase in the TTM period compared to previous years. The gross profit margin is healthy, indicating efficient management of production costs. However, the net profit margin is weak, and the company has struggled with profitability in past years. The EBIT and EBITDA margins have improved in the TTM period, reflecting better operational performance.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio, highlighting significant leverage and potential risk in financial stability. Stockholders' equity has improved, giving a better equity ratio. However, the return on equity remains low due to past negative net income, suggesting challenges in generating returns from shareholders' investments.

Cash Flow

The cash flow statements indicate negative free cash flow growth, primarily due to high capital expenditure and operational cash outflows. The operating cash flow to net income ratio is unfavorable, highlighting inefficiencies in converting profits to cash. The free cash flow to net income ratio is also weak, indicating cash flow challenges.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
134.56M	116.98M	113.06M	125.43M	102.08M	88.79M
	Gross Profit
65.12M	104.48M	109.67M	46.25M	35.35M	28.57M
	EBIT
23.79M	13.69M	-6.30M	7.36M	4.63M	5.10M
	EBITDA
31.43M	13.69M	71.02M	90.84M	4.63M	5.10M
	Net Income Common Stockholders
903.30K	-4.23M	13.63M	3.27M	-339.90K	577.41K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
292.88K	4.41M	6.05M	5.09M	8.54M	6.87M
	Total Assets
10.43M	156.49M	148.29M	84.81M	68.25M	52.21M
	Total Debt
2.66M	115.57M	97.74M	56.81M	45.98M	35.79M
	Net Debt
2.37M	111.16M	91.69M	51.72M	37.44M	28.92M
	Total Liabilities
7.81M	127.26M	117.25M	68.67M	57.10M	42.25M
	Stockholders Equity
2.30M	29.23M	31.03M	16.14M	11.15M	9.97M
Cash Flow		Free Cash Flow
-40.80M	-13.00M	-37.74M	-16.21M	-8.31M	-2.71M
	Operating Cash Flow
-33.02M	-6.66M	-31.24M	-11.26M	-5.21M	-469.46K
	Investing Cash Flow
-8.65M	-7.56M	-5.20M	-4.95M	-3.10M	-2.24M
	Financing Cash Flow
43.26M	12.47M	37.52M	12.76M	9.98M	3.44M

FlexShopper Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.22
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FPAY, the sentiment is Negative. The current price of 1.22 is below the 20-day moving average (MA) of 1.28, below the 50-day MA of 1.41, and below the 200-day MA of 1.37, indicating a bearish trend. The MACD of -0.09 indicates Positive momentum. The RSI at 43.04 is Neutral, neither overbought nor oversold. The STOCH value of 46.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FPAY.

FlexShopper Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WRLD	77 Outperform	$701.61M	8.64	19.28%	―	-2.78%	24.39%
ENVA	76 Outperform	$2.34B	12.19	17.19%	―	25.51%	36.96%
Sector *	63 Neutral	$4.30B	10.98	5.71%	232.99%	4.77%	-5.69%
FPAY	54 Neutral	$25.65M	―	3.09%	―	24.46%	-2805.36%
PRG	54 Neutral	$1.04B	5.63	31.77%	1.92%	2.29%	55.85%
ASPS	48 Neutral	$69.26M	―	26.79%	―	10.69%	51.69%

FlexShopper Corporate Events

FlexShopper Board Welcomes Patrick McCrory, Former Governor

On January 20, 2025, T. Scott King resigned from FlexShopper’s Board of Directors, and Patrick L. McCrory, former Governor of North Carolina, was elected to the board. McCrory’s extensive experience in public policy and business leadership is expected to add depth and value to FlexShopper’s strategic pursuits, enhancing shareholder value. The company’s Chairman and CEO expressed gratitude for King’s contributions and excitement for McCrory’s appointment.

FlexShopper Revamps Board and Boosts CEO Compensation

FlexShopper announced changes to its Board of Directors and amendments to an executive employment agreement. Sean Hinze resigned from the board, and Denis Echtchenko, with extensive investment experience, was elected as a new director, potentially enhancing the company’s strategic direction. Moreover, the company amended the employment agreement with CEO H. Russell Heiser Jr., increasing his salary and bonus potential, and awarding restricted stock units, indicating a commitment to retaining and incentivizing top leadership.

FlexShopper Announces Rights Offering for Stockholders

FlexShopper, Inc. has announced a rights offering, providing current stockholders the opportunity to purchase up to 35 million units, each comprising common stock and several purchase rights, at a fixed price. This move allows investors to potentially increase their holdings, with an over-subscription privilege for those fully exercising their basic rights, although any unexercised subscription rights will expire, possibly diluting ownership stakes.