PSFE - Paysafe: Operating Momentum Meets Improving Financial Conditions
2024-03-11 01:31:01 ET
Summary
- Paysafe grew revenue 8.1% in Q4 (2023: +7%), with further growth of about 5.5-7% expected for 2024.
- Adjusted EBITDA increased 13.1% in Q4 (2023: +11.9%). Only a 4.7% increase is forecast for 2024.
- The capital structure is 75% debt-funded, which is both a risk and an opportunity if central banks cut rates.
- Loss of operating momentum is a key risk for the company, considering negative tangible shareholders' equity of $2.3 billion.
- Free cash flow yield on enterprise value is in the low double digits, and over 40% relative to Paysafe's market capitalization.
Introduction
Paysafe ( PSFE ) recently reported Q4 2023 earnings, which I will cover below. Paysafe stock reacted negatively to the announcement, and the company is down 40% over the past year, worse than the 22% drop observed at larger peer PayPal ( PYPL ):
Paysafe stock evolution over the past year (Seeking Alpha)
