Digital Payment And iGaming Expansion Will Unlock Latin American Opportunities

Key Takeaways

• Expansion into high-growth digital payment verticals, strategic partnerships, and product innovation are driving market share gains and accelerating revenue growth.
  
• Focus on regulated, high-margin sectors, improved direct sales, and scalable wallet platforms strengthen customer retention, margin expansion, and long-term earnings potential.
  
• Heavy dependence on volatile high-risk markets, elevated customer churn, margin pressure, high leverage, and intensifying competition threaten Paysafe’s long-term growth and revenue stability.

Catalysts

Provides end-to-end payment solutions in the United States, Germany, the United Kingdom, and internationally.

• Paysafe is actively expanding into high-growth digital payment verticals—including online gaming and e-commerce in Latin America—capitalizing on the rapid migration from cash to digital payments and the projected 12% CAGR in e-commerce transaction value in regions like Peru. (Likely to drive sustained revenue growth and market share gains.)
  
• New partnerships (e.g., Fiserv, Tilled) and product launches (such as the PagoEfectivo digital wallet) are opening up additional distribution channels and target markets, while also enhancing the product suite for both SMBs and enterprise clients. (Expected to accelerate both top-line revenue and EBITDA growth.)
  
• Investment in direct sales channels and upmarket SMB targeting is improving sales force productivity, with 20% year-over-year increase in contract value per active rep and a shift toward larger, more stable merchants, supporting higher revenue per customer and improving net margins through better retention and reduced churn.
  
• The unified Paysafe Wallet platform, with improved integration (API access, LPMs, embedded payouts), is designed for scalability and efficient entry into new geographies, aligning with the rising adoption of alternative and digital wallets as mainstream payment methods. (Supports both margin expansion and longer-term earnings growth.)
  
• Paysafe’s heightened focus on regulated, high-margin verticals—such as iGaming and digital entertainment—positions the company to benefit from increasing global regulatory acceptance and legalization of online betting, further broadening the addressable market and driving long-term revenue and margin improvement.

Paysafe Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Paysafe's revenue will grow by 4.8% annually over the next 3 years.
• Analysts assume that profit margins will increase from -0.0% today to 6.6% in 3 years time.
• Analysts expect earnings to reach $128.6 million (and earnings per share of $1.53) by about July 2028, up from $-368.0 thousand today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 9.9x on those 2028 earnings, up from -2213.7x today. This future PE is lower than the current PE for the US Diversified Financial industry at 17.5x.
• Analysts expect the number of shares outstanding to decline by 2.27% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 13.2%, as per the Simply Wall St company report.

Paysafe Future Earnings Per Share Growth

Risks

• Paysafe’s growth is heavily reliant on high-risk verticals like iGaming and gambling, which face continual regulatory scrutiny and frequent changes—any tightening or bans could lead to revenue volatility and significant customer attrition, negatively impacting long-term revenue stability and earnings growth.
  
• Elevated attrition levels, particularly in the SMB (Small and Medium Business) segment, are outpacing new customer growth, and while management expects improvements, persistent churn could erode Paysafe’s merchant base and limit future revenue and net income expansion.
  
• Increasing competition and industry commoditization, including margin compression from a mix shift toward lower take-rate segments (such as e-commerce/iGaming) and a greater dependence on indirect ISO channels, may create sustained pressure on net margins and adjusted EBITDA growth.
  
• Paysafe's substantial leverage (net leverage at 4.9x) and relatively weak free cash flow conversion limit its ability to invest aggressively in innovation, technology upgrades, or strategic M&A, thereby constraining long-term revenue growth, operational flexibility, and resilience against macroeconomic or industry shocks.
  
• The growing dominance of large technology and payments companies (e.g., Apple, Google, Amazon), coupled with possible disruption from new decentralized finance and blockchain payment models, threaten Paysafe’s core business and market share over the long term, putting future topline growth and overall earnings at risk.

Valuation

• The analysts have a consensus price target of $15.883 for Paysafe 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 $22.0, and the most bearish reporting a price target of just $12.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.9 billion, earnings will come to $128.6 million, and it would be trading on a PE ratio of 9.9x, assuming you use a discount rate of 13.2%.
• Given the current share price of $13.73, the analyst price target of $15.88 is 13.6% 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.