Loss-Making Paysafe Limited (NYSE:PSFE) Set To Breakeven

We feel now is a pretty good time to analyse Paysafe Limited's (NYSE:PSFE) business as it appears the company may be on the cusp of a considerable accomplishment. Paysafe Limited provides end-to-end payment solutions in the United States, Germany, the United Kingdom, and internationally. With the latest financial year loss of US$20m and a trailing-twelve-month loss of US$13m, the US$1.2b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Paysafe's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Paysafe

Paysafe is bordering on breakeven, according to the 7 American Diversified Financial analysts. They expect the company to post a final loss in 2023, before turning a profit of US$31m in 2024. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 82% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Paysafe's growth isn’t the focus of this broad overview, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Paysafe is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Paysafe which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Paysafe, take a look at Paysafe's company page on Simply Wall St. We've also compiled a list of relevant factors you should look at:

1. Historical Track Record: What has Paysafe's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Paysafe's board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com