CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Paysafe stock forecast: how safe is its future?

By Prachi Sinha

Edited by Vanessa Kintu

10:14, 15 December 2021

Milan, Italy - APRIL 10, 2021- Paysafe company logo on laptop screen seen through an optical prism, creative interpretation. Dynamic and unique image from Paysafe website. Illustrative editorial.
Paysafe Stock Forecast: how safe is its future? – Photo: Shutterstock

After a complicated history of mergers and acquisitions, Paysafe (PSFE) touts itself  to be a one-point solution for businesses and consumers for online payments. This former FTSE 250 Index constituent was acquired for $3.9bn by an alliance between The Blackstone Group and CVC Capital Partners in December 2017. As of 31 March 2021, after a $9bn merger with the special purpose acquisition company (SPAC) Foley Trasimene Acquisition Corp II, the company is listed on the New York Stock Exchange (NYSE).

Paysafe’s offerings range from online to in-store payments and alternative payments to omnichannel transfers. It also boasts of subsidiary brands under its corporate umbrella, the most notable of them being Skrill, Neteller, Paysafecash and Paycard.

The company debuted on the NYSE at $13.50 per share price and reached a record low of $3.18 on 6 December, a 76% drop from its debut  price.

Paysafe price chart 2021

After third quarter results fell short of the company’s estimates, Paysafe lowered its performance targets of earnings, revenues and gross profits for the full year of 2021. In this article, we judge the Paysafe stock potential for the times to come. As the company navigates the market, after its Q3 financial results, join us as we perform a Paysafe stock analysis and catch up on recent news.

Paysafe stock fundamental analysis

The company recorded a net loss of $147.2m when it published its Q3 2021 results on 11 November. Philip McHugh, CEO of Paysafe, mentioned that while the reported adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) was in line with the company’s expectations, it missed out on the target ranges for its revenue and gross profits. 

Third quarter adjusted EBITDA was reported at $106.4m. While this was a 0.82% decrease from the Q3 2020 figure of $107.3m, it was well within the anticipated Q3 range of $95m to $110m.

The revenue reported for the three months ended 30 September 2021 stood at $353.6m, approximately a 0.54% decrease from its Q3 2020 result of $355.5m. The sale of Pay Later, the deferred payments arm of the Paysafe group, to Germany-based PSP Unzer, the Paysafe group took a hit of approximately $7.7m.

The company mentioned in the report that its Digital Wallet segment fell short of the performance expectations set out for it. Stricter gambling regulations and softness in key European markets drove the unit’s growth trend downwards. At a revenue level of $83.7m on 30 September 2021, it generated 15.1% less than its 2020 figure of $98.5m.

Representation of loss from Digital Wallet in Q3 2021

In its supplemental presentation to the press release of Q3 2021, Paysafe reiterated its strategy on addressing challenges that have hindered its performance in the quarter. However, it also made some revisions to its year-end growth and profitability numbers to stay realistic about its key targets.

Paysafe downgraded its full-year adjusted EBITDA guidance to a range of $425m to $435m, which is a steep reduction of $60m from its earlier anticipated higher range of $495m.

Full-year revenue expectations now sit at $1.47bn to $1.48bn, which translates into a $70m downgrade from its earlier higher revenue target of $1.55bn. And lastly, it expects the gross profits (excluding depreciation and amortisation) to be in the range of $870m to $880m, a $90m reduction from its earlier anticipated higher range of $970m.

Revised year-end figures

Paysafe share price news

Factoring in the reduced Q4 and year-end financial estimates from the company, investors’ confidence remains shaky about the stock’s prospects. After the Q3 2021 results were made public, investors participated in massive selling of the stock resulting in a huge volume jump to 258 million shares compared to 11.9 million the day before. The share price fell by 41.67%. This reduction in share price, from $7.27 to $4.24, came as a huge hit to the stock and it hasn’t recovered since.

XRP/USD

0.52 Price
-1.070% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 0.01168

US100

20,054.40 Price
+0.700% 1D Chg, %
Long position overnight fee -0.0250%
Short position overnight fee 0.0028%
Overnight fee time 21:00 (UTC)
Spread 7.0

Oil - Crude

69.20 Price
-1.670% 1D Chg, %
Long position overnight fee 0.0109%
Short position overnight fee -0.0328%
Overnight fee time 21:00 (UTC)
Spread 0.030

BTC/USD

69,482.55 Price
+0.370% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

Earlier this month, through its alternate payment business viafintech GmbH, Paysafe announced a partnership with Europe’s leading fintech company Solarisbank. With the merger, the companies aim to replace the traditional mode of bank branches and eliminate the need for physical locations for conducting basic banking services. This coming together of the companies would result in over 20,000 acceptance points for cash deposits and withdrawals for Solarisbank’s end customers.

Managing director and co-founder of viafintech GmbH at Paysafe, Sebastian Seifert, called this partnership a means to expanding their expertise and services, to a larger group of companies and their end customers across the European markets.

In the latest Paysafe stock news, on 8 December 2021, the stock made double-digit gains since its last close price following an announcement that CEO Philip McHugh had purchased 290,000 shares of the common stock for approximately $1m, investors’ spirits picked up. The share price increased from $3.64 to $4.28; an impressive one-day rally of 17.58%. 

In addition to the CEO, many other top-level executives of the company and independent board members purchased 447,000 shares for a total purchase price of $1.8m. Such significant internal purchases usually hint at a bullish view of the stock by insiders, and is potentially being undervalued at current levels. Whether this holds for Paysafe or the upward adjustment to its stock price will be short-lived remains to be seen in the coming days. Almost a week since this news, the stock is currently trading at $3.77 which is approximately 12% down from the $4.28 high.

Paysafe future price forecast

Several analysts have revised their Paysafe stock price prediction following the company’s Q3 results and subsequent earnings revisions.

Cowen & Co. analyst, George Mihalos, reduced the price target to $7 from $14 and downgraded the stock to ‘market perform’ from ‘outperform’.

Timothy Chiodo, an analyst with Credit Suisse analyst, lowered the Paysafe price target to $4 from $9. He continued to reiterate a neutral rating on the stock.

Milan Vaishnav, CMT, MSTA, a consulting technical analyst at Gemstone Equity Research & Advisory Services, shared a technical analysis for Paysafe: “The stock is in a secular downtrend ever since it marked its high at 17.25. The prices are under a secular decline, and are presently in a falling channel. However, the most recent price action suggests that the stock may now attempt to form a base between the 3.18 and 3.90 range. On the daily chart, the relative strength index (RSI) has crossed above 30 from the oversold territory which is bullish. MACD and PPO remain positive. On the weekly charts, RSI still remains in the oversold territory.

“The volumes are higher than their 25-day MA. When volumes increase near low levels, it may be a potential sign of a base formation for the stock. Any move above 4 will infuse more strength in the price and a technical pullback up to 7.40 in the near term can be expected. Any slip below 3.10 will invite more weakness.”

Even algorithm-based forecasting service Wallet Investor, which usually provides five-year price targets for stocks, does not offer a Paysafe stock prediction for 2022 to 2025. Wallet Investor is bearish on Paysafe. According to its forecast, the Paysafe share price could drop substantially to 0.006 by May 2022.

However, analyst predictions compiled by TipRanks were more encouraging, with the consensus target for the 12-month share price at $5.38 per share. The stock projection varied from the low of $4 to the high of $7. The average price target represents a 42.71% upside change from the last price of $3.77.

As of 14 December 2021, out of the five Wall Street analysts, four rated the Paysafe stock as ‘hold’ and only one recommended ‘buy’.

 Paysafe 12-months forecast stock chart

When looking for Paysafe stock buy, sell or hold recommendations, it’s important to bear in mind that analysts’ forecasts and price targets can be wrong. Analysts’ snap stock predictions are based on making fundamental and technical studies of the stock’s performance. Past performance is no guarantee of future results.

FAQs

Is Paysafe a good stock to buy?

Answer: Whether the Paysafe stock is a suitable investment depends on your investment objectives – and the opinion based on your own research. Remember, it’s important to reach your own conclusion of the company’s prospects and the likelihood of achieving analysts’ targets.

Will Paysafe stock go up or down?

Paysafe share price forecasts vary from a low of $4 to a high of $7, with the average price targets sitting at $5.38, based on five Wall Street analysts’ views compiled by TipRanks. At the time of writing, on 14 December 2021, the stock price is at $3.76.

Note that predictions can be wrong. Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before investing. And never invest or trade money you cannot afford to lose.

Read more: NIO stock forecast: Why is NIO underperforming?

Markets in this article

PSFE
Paysafe Limited
21.4000 USD
0.09 +0.430%
PSFE
Paysafe Limited
21.4000 USD
0.09 +0.430%

Rate this article

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

Still looking for a broker you can trust?

Join the 650,000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading