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3Pea: Strong Guidance, Uplisting, Should Propel Shares Higher

Inefficient Market profile picture
Inefficient Market


  • Fourth quarter results continued to show significant top line growth and continued bottom line profitability.
  • Management's guidance for 2018 calls for growth to meet or exceed the growth experienced in 2017.
  • During the first quarter, the company began taking steps to meet the various requirements to apply for uplisting to a national exchange.
  • The company has recently added several key executives from larger competitors.
  • Despite a recent increase in share price, the company is still valued attractively compared to industry peers.

Back in November, I wrote about why I was accumulating 3Pea International (TPNL). And the stock is up over 80% subsequent to my analysis. The recent increase in share price has been for good reason: Management has executed flawlessly. Growth has continued to accelerate, profitability has increased (despite investing in new hires to support further growth), and according to management, the best is yet to come in 2018.

For readers unfamiliar with the company, 3Pea International designs and develops payment solutions, prepaid card programs, and processing services under the PaySign brand name for corporate, consumer, and government applications. The company offers various services, including transaction processing, cardholder enrollment, value loading, cardholder account management, reporting, and customer service.

It also develops prepaid card programs for healthcare reimbursement payments, pharmaceutical co-pay assistance, corporate expense and per diem payments, and donor payments for source plasma and automobile dealership incentives, as well as payroll cards, general purpose re-loadable cards, travel cards, and loyalty rewards cards for the hospitality industry.

Its principal target markets for processing services comprise prepaid card issuers, retail and private-label issuers, small third-party processors, and small and mid-size financial institutions in the United States and internationally.

Last week the company announced fourth quarter and year-end results. Revenues in the fourth quarter 2017 increased 51% to $4.6m. Net income increased 7% to $537,000. The lower growth in the bottom line number is attributable to the company continuing to add administrative staff, invest in infrastructure, and build out various departments to support growth.

Revenues for the year ended December 31, 2017 were $15,234,091, an increase of $4,817,419 compared to the year ended December 31, 2016. The increase in revenue of approximately 46% was primarily due to an increase in the number of new corporate incentive prepaid card products and growth within existing card products.

This article was written by

Inefficient Market profile picture
Value-focused private investor. B.S. in finance from The Ohio State University.

Analyst’s Disclosure: I am/we are long TPNL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am not a financial advisor. You should consult your own financial advisor before acting on recommendations to consider its suitability for your investment circumstances.

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