Paysign Inc: Perfect Time to Make a Double, Fundamentals Surging
Paysign Stock Too Cheap to Ignore
After the massive 63% rally from the March lows, it’s difficult to find any technology stock that may have been overlooked, but I may have found one. Paysign Inc (NASDAQ:PAYS), a provider of payment solutions services, prepaid debit cards, rewards programs, and customizable payment services.
Paysign’s clients are found in sectors including healthcare, hospitality, pharmaceuticals, and retail.
PAYS stock plummeted to $3.63 during the March sell-off. It has rallied 178%, but Paysign stock remains well below its 52-week high of $17.46, down 26% over the past year.
PAYS stock could be set to signal a bullish golden cross pattern if the 50-day moving average can break above the 200-day moving average.
The chart shows that a breakout could send Paysign stock to $18.00.
Chart courtesy of StockCharts.com
Strong Fundamental Growth Supports Bullish Thesis for PAYS Stock
A glance at the company’s fundamentals supports why I feel Paysign stock is underappreciated and could be set for a significant rally.
Paysign Inc has recorded strong double-digit revenue growth in each of the last four years, to a record level in 2019. This implies an impressive compound annual growth rate (CAGR) of 43.8%.
| Fiscal Year | Revenues (Millions) | Growth |
| 2015 | $8.1 | |
| 2016 | $10.4 | 28.5% |
| 2017 | $15.2 | 46.3% |
| 2018 | $23.4 | 53.8% |
| 2019 | $34.7 | 48.0% |
(Source: “Paysign Inc.” MarketWatch, last accessed August 7, 2020.)
The forward estimates are optimistically strong, despite the COVID-19 threat.
Paysign Inc is expected to report revenue growth of 31% to $45.4 million this year and 40.9% to $64.0 million in 2021. (Source: “Paysign, Inc. (PAYS),” Yahoo! Finance, last accessed August 7, 2020.)
Paysign has also been reporting strong positive growth in earnings before interest, taxes, depreciation, and amortization (EBITDA), including setting a record in 2019.
| Fiscal Year | EBITDA | Growth |
| 2015 | $353,840 | |
| 2016 | $1.9 Million | 445.7% |
| 2017 | $2.6 Million | 36.9% |
| 2018 | $3.6 Million | 34.7% |
| 2019 | $7.6 Million | 112.9% |
(Source: MarketWatch, op. cit.)
The bottom line also looks impressive, with four consecutive years of growth in earnings per share (EPS), based on generally accepted accounting principles (GAAP).
| Fiscal Year | Diluted GAAP EPS | Growth |
| 2015 | -$0.06 | |
| 2016 | $0.03 | 150.0% |
| 2017 | $0.04 | 24.3% |
| 2018 | $0.05 | 32.4% |
| 2019 | $0.14 | 176.5% |
(Source: MarketWatch, op. cit.)
Looking ahead, Paysign Inc is estimated to report an adjusted $0.20 per diluted share this year, followed by $0.30 in 2021. (Source: Yahoo! Finance, op. cit.)
Paysign has been generating positive free cash flow (FCF), including four straight years of impressive growth.
| Fiscal Year | Free Cash Flow (Millions) | Growth |
| 2015 | -$1.6 | |
| 2016 | $1.2 | 172.9% |
| 2017 | $2.0 | 75.5% |
| 2018 | $4.2 | 106.6% |
| 2019 | $9.5 | 126.2% |
(Source: MarketWatch, op. cit.)
A look at the company’s balance sheet shows no debt, and $9.4 million in cash. (Source: Yahoo! Finance, op. cit.)
Analyst Take
In my view, it’s difficult to find a reason not to consider PAYS stock. There is some uncertainty, but the low share price discounts it, and Paysign stock could take off.
Insiders appear to be confident, and that’s a good sign. Over the last six months, insiders bought 700,000 Paysign shares and refrained from selling. (Source: Yahoo! Finance, op. cit.)
