Digital Payments Transition Will Unlock New Enterprise Opportunities

AN
AnalystConsensusTarget
Consensus Narrative from 9 Analysts
Published
30 May 25
Updated
24 Jul 25
AnalystConsensusTarget's Fair Value
US$7.55
34.8% undervalued intrinsic discount
24 Jul
US$4.92
Loading
1Y
-44.3%
7D
-7.9%

Author's Valuation

US$7.6

34.8% undervalued intrinsic discount

AnalystConsensusTarget Fair Value

Key Takeaways

  • Ongoing digital payments adoption and enhanced technology partnerships are driving increased client engagement, improved operating leverage, and expanding growth opportunities across multiple verticals.
  • Regulatory complexity and robust compliance infrastructure are supporting market share gains and client retention, while disciplined capital allocation fuels flexibility for long-term growth.
  • Loss of major clients, mounting competitive pressure, leadership transition, and dependence on organic growth heighten revenue volatility and risk to long-term stability.

Catalysts

About Repay Holdings
    A payments technology company, provides integrated payment processing solutions that enables consumers and businesses to make payments using electronic payment methods in the United States.
What are the underlying business or industry changes driving this perspective?
  • Repay is well positioned to benefit from the ongoing transition to digital payments, as client demand for advanced, integrated payment solutions-especially among financial institutions and credit unions-remains strong; investments in enterprise sales and expanded software partnerships are expected to accelerate new bookings and revenue in the second half of 2025 and beyond.
  • The adoption of embedded finance and value-added services, such as instant funding and integrated AR/AP platforms, is driving deeper client engagement and new monetization opportunities, which should support both revenue growth and net margin expansion as these high-value offerings are rolled out across more verticals.
  • Increased regulatory complexity around digital payments is driving financial institutions and enterprise clients to seek robust, compliant, and secure platforms, favoring established providers like Repay with proven technology and scaled operations-this will likely support improved client retention and potential market share gains, boosting revenue and long-term earnings quality.
  • Strategic investments in technology (such as enhanced ACH, instant funding, and proprietary clearing/settlement platforms) and a sharpened focus on partnership channels are increasing operating leverage, improving implementation times, and expanding Repay's supplier and client networks, all of which are catalysts for sustained gross profit and EBITDA growth.
  • A disciplined capital allocation strategy-including a significant share repurchase program, organic growth investments, and openness to accretive M&A-combined with robust free cash flow generation and strong liquidity, enhances earnings per share and provides flexibility to capture incremental long-term growth opportunities.

Repay Holdings Earnings and Revenue Growth

Repay Holdings Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?
  • Analysts are assuming Repay Holdings's revenue will grow by 4.1% annually over the next 3 years.
  • Analysts are not forecasting that Repay Holdings will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Repay Holdings's profit margin will increase from -4.2% to the average US Diversified Financial industry of 15.5% in 3 years.
  • If Repay Holdings's profit margin were to converge on the industry average, you could expect earnings to reach $54.2 million (and earnings per share of $0.55) by about July 2028, up from $-12.9 million today. The analysts are largely in agreement about this estimate.
  • In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 18.0x on those 2028 earnings, up from -36.3x today. This future PE is greater than the current PE for the US Diversified Financial industry at 17.5x.
  • Analysts expect the number of shares outstanding to grow by 1.76% per year for the next 3 years.
  • To value all of this in today's terms, we will use a discount rate of 9.31%, as per the Simply Wall St company report.

Repay Holdings Future Earnings Per Share Growth

Repay Holdings Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?
  • The loss of key clients in both Consumer and Business Payments, which resulted in significant year-over-year declines in revenue and gross profit, highlights persistent customer concentration risk and the potential for outsized revenue volatility if client churn continues or major clients are lost or consolidated, undermining long-term revenue stability and growth.
  • Despite a positive outlook for new client wins and vertical expansion, recent macroeconomic volatility and increased uncertainty in end-markets like automotive lending and personal loans create risks of weaker-than-expected consumer spending or heightened regulatory scrutiny in high-cost lending verticals, which could reduce transaction volumes and suppress both revenue and earnings growth.
  • The strategic review process was concluded without pursuing M&A or asset monetization, opting instead for incremental investment in organic growth-this poses execution risk, as successful acceleration in growth relies heavily on improved sales effectiveness and competitive differentiation; if these investments fail to yield expected results, net margin expansion and future profitability could be constrained.
  • The payment processing industry is facing ongoing transaction fee compression and rising competitive intensity from tech giants, neobanks, and other well-capitalized players expanding into verticalized and embedded payment solutions, which may erode Repay's pricing power, compress net margins, and limit the company's ability to maintain or grow market share.
  • Upcoming leadership transition, with the long-term CFO stepping down and an interim replacement in place, introduces uncertainty around financial stewardship and capital allocation at a critical time for executing on new strategic priorities, potentially impacting investor confidence and stability of future earnings.

Valuation

How have all the factors above been brought together to estimate a fair value?
  • The analysts have a consensus price target of $7.55 for Repay Holdings based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $12.0, and the most bearish reporting a price target of just $4.5.
  • In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $349.7 million, earnings will come to $54.2 million, and it would be trading on a PE ratio of 18.0x, assuming you use a discount rate of 9.3%.
  • Given the current share price of $5.24, the analyst price target of $7.55 is 30.6% higher.
  • We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Read more narratives