Paysafe Limited (NYSE:PSFE) is about to turn from loss to profit
With the company potentially at an important stage, we thought we’d take a closer look Paysafe Limited (NYSE:PSFE) future prospects. Paysafe Limited provides digital commerce solutions to online businesses, SME merchants and consumers through its Paysafe network worldwide. The $2.3 billion market cap company reported a final loss of $111 million on December 31, 2021 for its most recent fiscal year result. Many investors wonder about the rate at which Paysafe will make a profit, with the big question being “when will the business break even?” We’ve put together a brief overview of industry analysts’ expectations for the company, its breakeven year and its implied growth rate.
See our latest analysis for Paysafe
Paysafe is close to equilibrium, according to the 8 American IT analysts. They expect the business to post a terminal loss in 2021, before making a profit of US$74 million in 2022. Thus, the business is expected to break even in about 12 months or less. We calculated the rate at which the business must grow to reach the consensus forecast predicting breakeven within 12 months. It turns out that an average annual growth rate of 118% is expected, which signals a lot of confidence from analysts. If the business grows at a slower rate, it will become profitable later than expected.
Since this is a high-level preview, we won’t go into detail about Paysafe’s upcoming plans, however, take into consideration that overall, a high growth rate does not is not unusual, particularly when a company is in a period of investment.
One thing we’d like to highlight about Paysafe is its 102% leverage ratio. Generally, the rule of thumb is that debt should not exceed 40% of your equity, which in this case the company has significantly exceeded. Note that higher debt increases the risk of investing in the loss-making business.
There are fundamentals of Paysafe that are not covered in this article, but we must re-emphasize that this is just a basic overview. For a more complete overview of Paysafe, see Paysafe’s company page on Simply Wall St. We’ve also compiled a list of relevant aspects you should consider:
- Evaluation: What is Paysafe worth today? Has future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Paysafe is currently being mispriced by the market.
- Management team: An experienced management team at the helm increases our confidence in the business – take a look at who sits on Paysafe’s board and the CEO’s background.
- Other High Performing Stocks: Are there other stocks that offer better prospects with a proven track record? Explore our free list of these great stocks here.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.