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PaySign: Earnings Shoot Up

Mar. 05, 2020 11:04 AM ETPaySign, Inc. (PAYS)12 Comments


  • PaySign’s revenue growth was almost flat until it started its upward trajectory in 2017.
  • 2019 earnings jumped by a whopping 270% from the previous financial year.
  • PaySign continues to execute its growth strategy.
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Know what you own, and know why you own it. - Peter Lynch

PaySign (NASDAQ:PAYS) surprised the market recently when profits increased by more than 40% from 2017 to 2018 and even surpassed that rate by six folds in 2019. PaySign, Inc. is an integrated payment processor and debit card program manager offering various services such as transaction processing, cardholder enrollment and account management, and value loading. The company offers customized payment solutions to various organizations including private corporations, government institutions, and universities. In the early years of operations, the company focused mainly on providing co-pay assistance prepaid cards to the pharmaceutical industry. In 2011, it began marketing corporate incentive prepaid card-based payment solutions targeting the plasma donation industry. By 2018, more resources were devoted to card programs in the pharmaceutical industry.

Figure 1. PaySign Share Price

Financial Performance

PAYS’s revenue growth was almost flat until it started its upward trajectory in 2017. Annual growth rate was at the 20% mark in 2017, 40% in 2018, and 50% in 2019. The increase in revenue is mainly due to the growth in the company’s plasma programs and the new pharma business. These are not only a one-off increase as new onboarded plasma centers, and new cardholders will continue to generate revenue for the company. PAYS did not take profitability for granted in growing its business. 2019 earnings jumped by a whopping 270% from the previous financial year.

Figure 2. PaySign Revenue and Net Income (Quarterly)

Source: YChart

Valuation And Price Forecast

Early holders of PAYS enjoy an 800% portfolio gain in less than two years. Does this mean it is too late to jump into the boat? Analysts say that at the current price level, PAYS is still undervalued. Fair value is estimated to be more than 30% the current price. 12-month analysts' price forecast also looks rosy. The low

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This article was written by

Michael A. Gayed, CFA profile picture
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Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.

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