Bull of the Day: Paysafe Limited (PSFE)

Amid the fastest rebound in stock market history, gauging a company’s valuation has become essential, and Paysafe Limited PSFE stands out in terms of value while having respectable growth prospects as well.

As part of the Russel 2000, Paysafe shares still appear to have an abundance of upside at under $15, as small-cap stocks are starting to catch investors' attention and have joined in on the broader market rally.

Attributing to Paysafe’s upside potential are its somewhat essential and innovative offerings as a payment solutions provider. Considering such, Paysafe stock lands the Zacks Bull of the Day, with it noteworthy that its Zacks Financial Transaction Services Industry is in the top 18% of over 240 Zacks industries.

Paysafe Overview

Going public in 2021, Paysafe joined a wave of fintech companies that used SPACs to accelerate their public listings. While sustaining growth and investor confidence hasn’t been easy since Paysafe’s SPAC with Foley Trasimene Acquisition Corp., the company has significant assets in digital wallets and payment processing, enabling businesses and consumers to connect and transact seamlessly.

Furthermore, the risk-to-reward looks very favorable to invest in Paysafe’s specialized payments platform, as PSFE still has the undervalued prospects that investors are searching for with the broader market recouping more than 10% gains in the last three months. To that point, PSFE is still 50% from its 52-week high of $26 and once traded at an all-time high of $230 a share shortly after its SPAC merger.

Paysafe’s Intriguing Valuation

Optimistically, and reassuring to Paysafe’s rebound prospects, is that PSFE trades at just 5X forward earnings compared to an all-time high of 128X and its median of 9X. This is also a significant discount to its industry average of 25X forward earnings, with some prominent peers being PayPal PYPL and Fiserv FI. Plus, Paysafe stock trades at less than 1X forward sales versus the industry average of 6.9X.

Paysafe’s Favorable Outlook

Benefiting from a strong business environment and making Paysafe’s “cheap” valuation more attractive, the company’s total sales are expected to be up 1% this year and are projected to rise another 8% in fiscal 2026 to $1.85 billion.

Even better, Paysafe’s annual earnings are currently slated to increase 12% in FY25 and are forecasted to spike another 15% in FY26 to $2.77 per share.

Bottom Line

Considering the exuberant optimism in the stock market right now, Paysafe stock is certainly worthy of consideration as PSFE is starting to look like a bargain and may be poised to rip higher if the fintech firm can start to reaffirm its favorable outlook.         

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research