Paysafe and Foley Trasimene Acquisition Corp. II (BFT) announced their merger in December 2020. The merger was approved by BFT shareholders on March 25 and Paysafe started trading on its own recently. What is Paysafe's (PSFE) stock forecast for 2021?
Paysafe provides global payment processing and has a huge business that handles $100 billion in payments volume annually. Its brands include Skrill, Neteller, and Paysafecard.
When PSFE stock started trading
Paysafe went public through a merger with SPAC Foley Trasimene. The transaction closed on March 30 and the ticker symbol change from "BFT" to "PSFE" became effective on March 31 on NYSE. William Foley, II, the founder and chairman of Foley Trasimene, will serve as chairman of Paysafe's newly formed board of directors. Philip McHugh will still be the CEO of the combined company. The stock fell by nearly 11 percent on March 31. However, it gained 8.2 percent of April 2, which helped to recoup a large part of the debut losses.
Paysafe's stock forecast
Currently, just one analyst covers Paysafe stock, according to Market Beat. The analyst has a buy rating and a target price of $19, which implies a possible upside of 30 percent for the stock. Compass Point initiated coverage on PSFE on March 31.
According to The Fly, Compass Point analyst Michael Del Grosso sees the company as a "relatively scarce asset" within the payments industry given its "unique" business strategy, geographical footprint, and focus on the iGaming industry. He also thinks that PSFE deserves a premium valuation due to its high-growth verticals and expansion opportunities.
Paysafe is a good long-term investment.
The long-term prospects of the global payments industry are very bright. According to Grand View Research, the global digital payment market is expected to expand at a CAGR of 19.4 percent from 2021 to 2028, driven by the high adoption rate of smartphones, the rise in e-commerce sales, and the improved internet penetration globally.
Paysafe is set to take advantage of these favorable trends in the industry. Being well-capitalized, having an experienced management team, and exposure to high-growth verticals puts it ahead of a lot of its peers in the space. Due to its expense management, Paysafe has higher EBITDA margins compared to the market leader PayPal. It's also a global leader in iGaming with DraftKings and Gloden Nugget among its customers. This segment is expected to see explosive growth going forward. Paysafe is also expanding into the cryptocurrency market. All of these favorable macroeconomic and company-specific factors make Paysafe a good long-term investment.
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