Paymentus Holdings, Inc. (PAY): A Bull Case Theory

We came across a bullish thesis on Paymentus Holdings, Inc. on Stay Invested’s Substack by Denis Gorbunov. In this article, we will summarize the bulls’ thesis on PAY. Paymentus Holdings, Inc.'s share was trading at $28.29 as of August 1^st. PAY’s trailing P/E was 70.72 according to Yahoo Finance.

Paymentus (NYSE: PAY) is capitalizing on inefficiencies in traditional banking, particularly in slow money transfers, by providing a real-time, 24/7 bill payment infrastructure. Unlike digital wallets, Paymentus does not hold customer funds; instead, it connects payers, billers, banks, and card networks through its proprietary Instant Payment Network, enabling instant transfers where supported by real-time payment rails.

The platform serves over 2,500 billers across utilities, government agencies, and insurance sectors, markets with complex billing needs and high retention rates. Paymentus differentiates itself with multi-channel capabilities, allowing payments via browser, app, IVR, chat, SMS, or walk-in, all synchronized in real time. Its business model combines transaction fees, subscription-based hosted portals, premium add-ons, and partnerships like Oracle for scalability. Security remains a priority, with alignment to NIST cybersecurity standards and rigorous audits, addressing risks tied to instant transactions.

The company has zero long-term debt, $41 million in free cash flow, and reported 48% YoY revenue growth, reflecting strong fundamentals despite flat earnings as it reinvests in technology and partnerships. Institutional ownership has increased, signaling confidence in sustained momentum. Paymentus’s moat lies in its deeply integrated ecosystem, sticky enterprise relationships, and robust regulatory compliance, positioning it as a leading U.S. bill payment solution amid competition from ACI Worldwide, Fiserv, and InvoiceCloud.

While not a peer-to-peer app, its infrastructure model and recurring revenues make it a compelling growth story. With improving financials, strategic partnerships, and a potential breakout above $40 signaling technical strength, Paymentus offers attractive long-term upside in a sector resilient to economic downturns.

Previously we covered a bullish thesis on Oddity Tech Ltd. (ODD) by Lorenzo Bastianelli in March 2025, which highlighted strong revenue growth, margin expansion, and international opportunities. The company’s stock price has appreciated approximately by 62.76% since our coverage. This is because the thesis played out with continued outperformance. The thesis still stands as growth drivers remain intact. Denis Gorbunov shares a distinct focus, emphasizing the digital payments opportunity with Paymentus.

Paymentus Holdings, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held PAY at the end of the first quarter which was 25 in the previous quarter. While we acknowledge the potential of PAY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.