Paysafe: Where Is The Floor?

seekingalpha2021-08-23

Summary Paysafe's revenue growth for its fiscal 2021 second quarter has sped up. High leverage has hampered profitability and will remain a headwind until the company generates enough free cash flow ...

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Comments

MrGreen
2021-08-23
MrGreen
Like
- Lelelok92:
  Ok
lyj893
2021-08-23
lyj893
Ok
Jinkachu
2021-08-23
Jinkachu
Like and share
- MrGreen:
  like
- lyj893:
  Ok
peterob1
2021-08-23
peterob1
Wear condom la! Play save
- peterob1:
  Haha
RachelNg
2021-08-23
RachelNg
Cool
Niknaks
2021-08-23
Niknaks
I got out early .. too much hype

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nPaysafe: Where Is The Floor?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-08-23 17:58 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4451055-paysafe-where-is-the-floor><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nPaysafe's revenue growth for its fiscal 2021 second quarter has sped up.\nHigh leverage has hampered profitability and will remain a headwind until the company generates enough free cash flow ...</p>\n\n<a href=\"https://seekingalpha.com/article/4451055-paysafe-where-is-the-floor\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"PSFE","symbol_name":"Paysafe Ltd","start_time":0,"source_url":"https://seekingalpha.com/article/4451055-paysafe-where-is-the-floor","article_id":"1190758315","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1190758315","pubTimestamp":1629712689,"sourceInfo":null,"weMediaInfo":null,"summary":"Summary\n\nPaysafe's revenue growth for its fiscal 2021 second quarter has sped up.\nHigh leverage has ","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"PSFE":"Paysafe Ltd"},"translate_title":"PaySafe：楼层在哪里？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"PSFE":0.9},"content_text":"Summary\n\nPaysafe's revenue growth for its fiscal 2021 second quarter has sped up.\nHigh leverage has hampered profitability and will remain a headwind until the company generates enough free cash flow on a quarterly basis to pay it back.\nThe share price continues to fall on the back of negative SPAC sentiment.\n\nipopba/iStock via Getty Images\nPaysafe's (PSFE) fall was immediately followed by another fall. The company has now become one of the poster boys for the decline of special purpose acquisition companies and DeSPACs. Of how a go-public conduit that was once held in high regard eventually came crashing down when exposed to the advent of time. For many Paysafe bulls, the worst possible scenario has come to pass. But they are not alone, nearly all investors in DeSPACs are feeling the smoke from the burning of their respective investments. This is despite these targeting entirely different sectors, customers, and geographies.\nTo illustrate this conundrum, a riddle. What does a dog toy company, a direct-to-consumer telehealth company, a digital lender, and Paysafe have in common apart from having been SPACs?\nData by YCharts\nPaysafe's bulls have been left reeling, we all have. As DeSPACs regardless of their underlying financials and industry continue to show a strong correlation with each other. I continue to believe this to be a short-term aberration. In the longer term, it should melt and allow companies with solid financials to rise to higher values.\nThe problem left for Paysafe bulls is does the company possess these solid financials?\nLeverage, Faster Growth, And Cash Burn\nPaysafe recently published its fiscal 2021 second-quarter results. This saw the company realize revenue of$384.34 million, a year-over-year increase of 12.7% and a beat of $5.9 million on analyst estimates. It's encouraging that the rate of revenue growth sped up from the 5% recorded in the previous quarter as the company was able to record a 41% YoY growth in payment volume to $32 billion.\nUnfortunately, this did not translate to material net profit for the period which came in at just $6.6 million, albeit an improvement on the net loss of $15.9 million in the year-ago quarter. For its 2021 fiscal year, Paysafe expects revenue to be in the range of $1.53 billion to $1.55 billion versus a consensus of $1.55 billion. Adjusted EBITDA is expected to be in the range of $480 million to $495 million. This places the company's forward price to revenue multiple at 3.85x. Of course, this rises to 5x when the net debt of $1.87 billion Paysafe held on its balance as at the end of the quarter is considered.\nIndeed, the company held long-term debt of $2.1 billion only partially offset by cash and equivalents of $248 million. As free cash flow during the quarter was negative at $8.5 million, the company is not currently in the position of being able to pay back its debt through its operations. This cost $61 million in interest payment during the quarter, up 15% from the year-ago quarter and around 9x times net income during the period. This debt was inherited from the company's previous private equity owners and will restrict the company's operational capacity until it can be paid off from consistent free cash flow.\nThe company also announced the acquisition ofSafetypay, a Florida-based payments platform that enables eCommerce transactions and operating primarily in Latin America. However, while the acquisition cost of $441 million was provided, the underlying financials for Safetypay was not.\nWhat Comes Next?\nI like many other investors in SPAC companies expected Q2 2021 results period to be when the correlation begins to melt and a period that would allow stronger companies to start detaching themselves from the SPAC herd. However, this correlation only seems to have heightened. In this sense, Paysafe's Q2 2021 results never really mattered. Whether good or bad the common shares would have fallen. This systematic selloff of SPACs is a holdout from the SPACs are dead trade mantra.\nSo what comes next?\nThere will eventually be a detachment from the retail-led ebbs and flows of the wider SPAC market and Paysafe might stand to benefit whenever this happens. The Q2 results were decent with growth picking up and the company improving its profitability. While I'd stop short of calling the financials solid as high debt will continue to weigh down on profitability, Paysafe is not standing still and stands to benefit from the expanding North America iGaming market. For future returns, Paysafe bulls should in the interim look to the wider SPAC market where sentiment currently sits at rock bottom. In the longer term, look to higher profitability to support a concrete plan by management to materially reduce debt. This will help the company reduce its current $200 million annual interest cost.\nDeSPACs are not standing still. And I continue to believe that current negative sentiment has run its course and the sell SPAC trade too crowded. Hence, just as time saw companies once held in high regard come crashing down, it will see them rise back up.","kind":"news","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":835647028,"gmtCreate":1629715987064,"gmtModify":1676530108949,"author":{"id":"3576511277084418","authorId":"3576511277084418","name":"MrGreen","avatar":"https://static.tigerbbs.com/15d34383baa6cc8886d9224669a807d4","vip":1,"crmLevel":6,"crmLevelSwitch":0,"authorIdStr":"3576511277084418","idStr":"3576511277084418"},"htmlText":"Like","listText":"Like","text":"Like","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/835647028","repostId":1190758315,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":5620798,"gmtCreate":1629716490895,"gmtModify":1663232789888,"authorId":3578056830476800,"author":{"id":3578056830476800,"idStr":"3578056830476800","authorId":3578056830476800,"name":"Lelelok92","avatar":"https://static.tigerbbs.com/4e4265424827068345fa1eb8e5acd58b","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":835647028,"type":1,"supId":0,"prevId":0,"content":"Ok","text":"Ok","html":"Ok"}],"langContent":"EN"},{"id":835641177,"gmtCreate":1629715494099,"gmtModify":1676530108810,"author":{"id":"3560426409941126","authorId":"3560426409941126","name":"lyj893","avatar":"https://static.tigerbbs.com/2565d9a5280064e66bfaadce594b1683","vip":1,"crmLevel":5,"crmLevelSwitch":0,"authorIdStr":"3560426409941126","idStr":"3560426409941126"},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/835641177","repostId":1190758315,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":835643910,"gmtCreate":1629715297430,"gmtModify":1676530108795,"author":{"id":"3569530406935035","authorId":"3569530406935035","name":"Jinkachu","avatar":"https://static.tigerbbs.com/a47cb60ff4f5df9c8eac85aa6198baa0","vip":1,"crmLevel":3,"crmLevelSwitch":1,"authorIdStr":"3569530406935035","idStr":"3569530406935035"},"htmlText":"Like and share&nbsp;","listText":"Like and share&nbsp;","text":"Like and share","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/835643910","repostId":1190758315,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":5620737,"gmtCreate":1629715982093,"gmtModify":1663232791138,"authorId":3576511277084418,"author":{"id":3576511277084418,"idStr":"3576511277084418","authorId":3576511277084418,"name":"MrGreen","avatar":"https://static.tigerbbs.com/15d34383baa6cc8886d9224669a807d4","vip":1,"crmLevel":6,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":835643910,"type":1,"supId":5620675,"prevId":0,"content":"<u>like</u>","text":"<u>like</u>","html":"<u>like</u>"},{"id":5620675,"gmtCreate":1629715498944,"gmtModify":1663232790935,"authorId":3560426409941126,"author":{"id":3560426409941126,"idStr":"3560426409941126","authorId":3560426409941126,"name":"lyj893","avatar":"https://static.tigerbbs.com/2565d9a5280064e66bfaadce594b1683","vip":1,"crmLevel":5,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":835643910,"type":1,"supId":0,"prevId":0,"content":"Ok","text":"Ok","html":"Ok"}],"langContent":"EN"},{"id":835649506,"gmtCreate":1629715240605,"gmtModify":1676530108773,"author":{"id":"3582888287934264","authorId":"3582888287934264","name":"peterob1","avatar":"https://static.tigerbbs.com/d59b7e35254008f12e8d269f053963b9","vip":1,"crmLevel":2,"crmLevelSwitch":0,"authorIdStr":"3582888287934264","idStr":"3582888287934264"},"htmlText":"Wear condom la! Play save","listText":"Wear condom la! Play save","text":"Wear condom la! Play save","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/835649506","repostId":1190758315,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":5620653,"gmtCreate":1629715247893,"gmtModify":1631896525569,"authorId":3582888287934264,"author":{"id":3582888287934264,"idStr":"3582888287934264","authorId":3582888287934264,"name":"peterob1","avatar":"https://static.tigerbbs.com/d59b7e35254008f12e8d269f053963b9","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":835649506,"type":1,"supId":0,"prevId":0,"content":"Haha","text":"Haha","html":"Haha"}],"langContent":"EN"},{"id":835652900,"gmtCreate":1629714642000,"gmtModify":1676530108665,"author":{"id":"3577349862351641","authorId":"3577349862351641","name":"RachelNg","avatar":"https://static.tigerbbs.com/c686e5f51b908bf5b83c479fe9153fb1","vip":1,"crmLevel":2,"crmLevelSwitch":0,"authorIdStr":"3577349862351641","idStr":"3577349862351641"},"htmlText":"Cool","listText":"Cool","text":"Cool","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/835652900","repostId":1190758315,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":835621522,"gmtCreate":1629713431266,"gmtModify":1676530108343,"author":{"id":"3556496546285967","authorId":"3556496546285967","name":"Niknaks","avatar":"https://static.tigerbbs.com/28a974e972a2d9f83be2d5dd9fa35a15","vip":1,"crmLevel":6,"crmLevelSwitch":0,"authorIdStr":"3556496546285967","idStr":"3556496546285967"},"htmlText":"I got out early .. too much hype","listText":"I got out early .. too much hype","text":"I got out early .. too much hype","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/835621522","repostId":1190758315,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":70,"commentSize":8,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1190758315"}