Financial Performance - Revenue for Q3 2024 was $427.1 million, a 7.0% increase from $396.4 million in Q3 2023[14] - Net loss for Q3 2024 was $13.0 million, compared to a net loss of $2.5 million in Q3 2023, reflecting a significant increase in losses[14] - Operating income for the nine months ended September 30, 2024, was $103.8 million, down from $112.4 million in the same period of 2023, indicating a decline of 7.0%[14] - The company reported a comprehensive income of $5.1 million for Q3 2024, compared to a comprehensive loss of $11.4 million in Q3 2023[14] - For the nine months ended September 30, 2024, the net loss was $11,351 thousand, compared to a net loss of $8,122 thousand for the same period in 2023, representing a 39.5% increase in losses[23] - For the three months ended September 30, 2024, the company reported a net loss of $12,977,000, compared to a net loss of $2,549,000 for the same period in 2023, resulting in a basic and diluted net loss per share of $0.21[46] - Adjusted EBITDA for the three months ended September 30, 2024 was $117,787 million, compared to $116,076 million for the same period in 2023, reflecting a slight increase[121] - Adjusted EBITDA increased by $11,787, or 3.5%, to $348,709 for the nine months ended September 30, 2024[189] Assets and Liabilities - Total assets decreased to $4.92 billion as of September 30, 2024, from $5.23 billion at the end of 2023, a reduction of approximately 5.8%[17] - Total liabilities decreased to $4.04 billion from $4.34 billion, a decline of 6.7%[17] - Shareholders' equity as of September 30, 2024, was $877.0 million, slightly down from $883.3 million at the end of 2023[17] - The company has a total debt of $1,723,000,000, which includes a $305,000,000 revolving credit facility and a $1,018,000,000 senior secured USD first lien term loan facility[62] - As of September 30, 2024, total lease liabilities amounted to $42,317 million, with undiscounted cash flow lease payments totaling $52,060 million[114] Cash Flow and Expenses - Cash and cash equivalents increased to $241.4 million from $202.3 million, representing a growth of 19.3%[17] - Cash flows provided by operating activities for the nine months ended September 30, 2024, were $194,909 thousand, up from $172,430 thousand in 2023, indicating an increase of 13.0%[23] - The company reported a depreciation and amortization expense of $208,006 thousand for the nine months ended September 30, 2024, compared to $197,046 thousand in 2023, an increase of 5.6%[23] - Selling, general and administrative expenses increased by $22,712, or 18.7%, to $143,907 for the three months ended September 30, 2024, from $121,195 for the same period in 2023[166] - Cost of services (excluding depreciation and amortization) increased by $14,022, or 8.5%, to $178,099 for the three months ended September 30, 2024, from $164,077 for the same period in 2023[165] Segment Performance - Revenue from external customers in the Merchant Solutions segment was $235,534 million for the three months ended September 30, 2024, up from $213,106 million in 2023, indicating a growth of 10.5%[119] - Digital Wallets segment revenue for the three months ended September 30, 2024 was $183,397 million, an increase from $172,317 million in the same period of 2023, representing a growth of 6.9%[119] - Merchant Solutions segment revenue grew by $76,452, or 11.7%, primarily due to e-commerce and SMB growth[177] - Digital Wallets segment revenue increased by $27,678, or 5.1%, driven by merchants onboarded in the prior year[177] Shareholder Activities - The company repurchased 1,675,815 shares for a total amount of $25 million during the nine months ended September 30, 2024, under its share repurchase program[147] - The company authorized a share repurchase program in November 2023, allowing for the repurchase of up to $50,000 of common shares[95] - Share-based compensation increased to $35,015 thousand for the nine months ended September 30, 2024, compared to $23,061 thousand in 2023, reflecting a 52.0% increase[23] - Share-based compensation expense for the three months ended September 30, 2024, was $12,690, an increase of 156.3% from $4,938 in the same period of 2023[82] Regulatory and Market Environment - The company is subject to complex regulatory requirements and significant competition, which may impact future performance[131] - Recent leadership changes include the appointment of John Crawford as Chief Financial Officer on September 3, 2024[145] Other Financial Metrics - The effective tax rate for the three months ended September 30, 2024, was 18.5%, while for the nine months it was 533.1%, significantly impacted by U.S. Base Erosion and Anti-Abuse Tax charges[49] - The company incurred impairment expenses on goodwill and intangible assets amounting to $0.1 million in Q3 2024, compared to no such expenses in Q3 2023[14] - The company reported a foreign currency translation gain of $18.1 million in Q3 2024, compared to a loss of $8.9 million in Q3 2023[14] - The company recorded a litigation provision of $1,203 as of September 30, 2024, down from $2,200 as of December 31, 2023, due to a settlement payment[104]

Group 1 - Paysafe Limited (PSFE) shares increased by 6.4% to close at $24.45, with notable trading volume compared to typical sessions, and an overall gain of 8.1% over the past four weeks [1][2] - The company's strength lies in its ability to facilitate seamless connections between businesses and consumers in the entertainment sector, leveraging over 25 years of experience in online payments [2] - On October 29, 2024, Paysafe partnered with Deutsche Bank AG to provide cash access services for private customers, which is expected to enhance market reach and transaction volume [3] Group 2 - Paysafe is projected to report quarterly earnings of $0.58 per share, reflecting a year-over-year increase of 1.8%, with revenues anticipated at $424.5 million, up 7.1% from the previous year [3] - The consensus EPS estimate for Paysafe has remained unchanged over the last 30 days, indicating that stock price movements may not continue without trends in earnings estimate revisions [5] - Paysafe holds a Zacks Rank of 3 (Hold), indicating a neutral outlook, while another company in the same industry, Freightos Limited, saw a significant price increase of 27.5% [5]

Core Viewpoint - Paysafe Limited (PSFE) is anticipated to report a year-over-year increase in earnings driven by higher revenues, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The earnings report is scheduled for November 13, 2024, with a consensus EPS estimate of $0.58, reflecting a +1.8% change year-over-year. Revenues are projected at $424.5 million, indicating a 7.1% increase from the previous year [3][2]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, suggesting stability in analysts' assessments [4]. The Most Accurate Estimate for Paysafe is higher than the consensus, resulting in a positive Earnings ESP of +5.17%, indicating a bullish outlook from analysts [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [8]. Paysafe's current Zacks Rank is 3, which supports the likelihood of beating the consensus EPS estimate [11]. Historical Performance - Paysafe has a history of exceeding consensus EPS estimates, having beaten expectations in three out of the last four quarters. In the last reported quarter, it delivered a surprise of +47.50% by posting earnings of $0.59 per share against an expectation of $0.40 [12][13]. Industry Context - Shift4 Payments (FOUR), a competitor in the financial transaction services industry, is expected to report an EPS of $1.11 for the same quarter, reflecting a +35.4% year-over-year change, with revenues projected at $369.07 million, up 51.9% from the previous year [17]. However, Shift4's Earnings ESP is -3.39%, combined with a Zacks Rank of 4, indicating challenges in predicting an earnings beat [18].

Core Viewpoint - Paysafe Limited (PSFE) has consistently surpassed earnings estimates and is well-positioned for future earnings growth, making it a strong candidate for investors in the Zacks Financial Transaction Services industry [1]. Earnings Performance - In the most recent quarter, Paysafe reported earnings of $0.59 per share, exceeding the expected $0.40 per share by a surprise of 47.50% [2]. - For the previous quarter, the company reported $0.57 per share against an expectation of $0.34 per share, resulting in a surprise of 67.65% [2]. Earnings Estimates and Predictions - Recent estimates for Paysafe have been increasing, with a positive Zacks Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat [3][6]. - The current Earnings ESP for Paysafe is +5.17%, suggesting that analysts are optimistic about the company's earnings prospects [6]. Zacks Rank and Success Rate - Paysafe holds a Zacks Rank of 1 (Strong Buy), which, when combined with a positive Earnings ESP, indicates a high probability of beating earnings estimates [6]. - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% success rate in producing positive surprises [4].

franckreporter/iStock Unreleased via Getty Images Introduction Paysafe (NYSE:PSFE) has significantly outperformed its largest competitor PayPal (PYPL) so far in 2024, delivering a ~70% gain against the circa 17% return delivered by PayPal: PSFE vs PYPL in 2024 (Seeking Alpha) I also covered Paysafe back in March 2024, arguing the shares were undervalued as the company would benefit from operating momentum, as well as lower central bank rates. After reviewing Paysafe's Q2 2024 results, I still think the comp ...

U.S. stocks traded higher toward the end of trading, with the Dow Jones index jumping more than 300 points on Tuesday. The Dow traded up 0.86% to 39,696.74 while the NASDAQ rose 2.17% to 17,143.94. The S&P 500 also rose, gaining, 1.44% to 5,421.43. Leading and Lagging Sectors Information technology shares climbed by 2.7% on Tuesday. In trading on Tuesday, energy shares fell 1%. Top Headline Shares of Paysafe Ltd PSFE jumped around 9% on Tuesday after the company reported its second-quarter financial results ...

Core Viewpoint - Paysafe Limited (PSFE) reported quarterly earnings of $0.59 per share, exceeding the Zacks Consensus Estimate of $0.40 per share, and showing an increase from $0.56 per share a year ago, representing a 47.50% earnings surprise [1] Financial Performance - The company posted revenues of $439.92 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 2.69%, compared to $402.34 million in the same quarter last year [2] - Over the last four quarters, Paysafe has exceeded consensus EPS estimates three times and topped revenue estimates two times [2] Stock Performance - Shares of Paysafe Limited have increased approximately 51.4% since the beginning of the year, significantly outperforming the S&P 500's gain of 12.1% [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.61 on revenues of $419.6 million, and for the current fiscal year, it is $2.46 on revenues of $1.7 billion [7] - The estimate revisions trend for Paysafe Limited is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Financial Transaction Services industry, to which Paysafe belongs, is currently ranked in the top 27% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Group 1 - The article compares two companies in the Financial Transaction Services sector: Paysafe Limited (PSFE) and Flyware (FLYW), focusing on their valuation metrics to determine which is the better investment option for undervalued stocks [2][8] - PSFE has a forward P/E ratio of 7.66 and a PEG ratio of 0.42, indicating a potentially undervalued status, while FLYW has a significantly higher forward P/E of 1,737 and a PEG ratio of 31.38, suggesting it may be overvalued [1][5] - PSFE's P/B ratio is 1.31, compared to FLYW's P/B of 2.71, further supporting the argument that PSFE is a more attractive value investment [5] Group 2 - PSFE holds a Zacks Rank of 2 (Buy), indicating a stronger earnings outlook compared to FLYW, which has a Zacks Rank of 4 (Sell) [6] - The Value category of the Style Scores system evaluates companies based on key metrics such as P/E ratio, P/S ratio, and earnings yield to identify undervalued stocks [7] - Overall, PSFE is positioned as the superior value option due to its solid earnings outlook and favorable valuation figures [8]

Valuation Metrics - Investors primarily assess a company's value using price-to-earnings (P/E) and price-to-sales (P/S) ratios, where P/E measures annual earnings relative to stock price, and P/S indicates the price investors pay for each dollar of revenue generated [1] - The price-to-book (P/B) ratio is calculated by dividing the market capitalization by the book value of equity, helping to identify low-priced stocks with high growth potential [26][27] - A P/B ratio of less than one suggests that a stock is undervalued, while a ratio above one indicates it may be overvalued [4][18] Company Profiles - Paysafe Limited, headquartered in Las Vegas, is a specialized payments platform offering payment processing solutions and digital wallets [9] - Deluxe, based in Minneapolis, MA, provides payment and business technology solutions to help businesses manage transactions [38] - KB Home, a prominent homebuilder in the U.S., generates 99.5% of its revenue from homebuilding and 0.5% from financial services [35] Growth Projections - Deluxe has a projected 3-5 year EPS growth rate of 12% and holds a Zacks Rank of 2 with a Value Score of A [10] - KB Home has a projected 3-5 year EPS growth rate of 11.8% and also holds a Zacks Rank of 2 with a Value Score of A [13] - Paysafe Limited has a projected 3-5 year EPS growth rate of 18.7% and holds a Zacks Rank of 2 with a Value Score of A [34] - ASE Technology has a projected 3-5 year EPS growth rate of 28.7% and holds a Zacks Rank of 2 with a Value Score of A [37] Screening Parameters - Stocks with a Zacks Rank of 1 (Strong Buy) or 2 (Buy) are expected to outperform regardless of market conditions [8] - A lower P/E or P/S ratio compared to the industry median is considered favorable for stock selection [20][31] - A Value Score of A or B combined with a Zacks Rank of 1 or 2 offers strong investment opportunities [33]

Group 1: Small-Cap Stocks Performance - Small-cap stocks, represented by the Russell 2000 index, have historically outperformed larger stocks over time, especially coming out of the pandemic [1][25] - The Russell 2000 index has faced challenges, falling behind the S&P 500 since March 2023, despite a strong performance in 2022 [37] Group 2: Company Highlights - Paysafe (PSFE) has seen a stock increase of 43% since last year, with a current price under $18 and a projected earnings growth of 163.8% for the next year, trading at 17 times forward P/E [3][21][38] - Rackspace Technology (RXT) reported a revenue surge of 35% in Q1 to $1.05 billion, with a project backlog of $10 billion, indicating strong future growth [7][23] - Tutor Perini (TPC) stock has increased by 136% this year, driven by winning contracts for complex megaprojects, resulting in a profit of $15.8 million in Q1 compared to a loss of $49 million a year ago [16][42] - Consol Energy (CEIX) operates the largest underground coal mine in the U.S. and has seen its stock rise 55% from 12-month lows, despite being down 5% year-to-date [32][46] - Immersion (IMMR) reported a significant revenue increase to almost $44 million from $7 million last year, with profits more than doubling to 59 cents per share [12][48] Group 3: Industry Trends - The payments processing industry is competitive, with Paysafe focusing on niche markets such as online gaming and cryptocurrencies to differentiate itself [38] - The construction and engineering sector is benefiting from government spending, particularly through the Infrastructure Investment and Jobs Act, which has allowed companies like Tutor Perini to secure lucrative contracts [42] - The coal industry continues to face challenges due to environmental policies, with a significant reduction in coal-fired power plants over the past decade [45]