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LSAK

Lesaka Technologies NasdaqGS:LSAK Stock Report

Last Price

US$3.83

Market Cap

US$227.0m

7D

25.2%

1Y

-18.7%

Updated

04 Oct, 2022

Data

Company Financials +
LSAK fundamental analysis
Snowflake Score
Valuation5/6
Future Growth5/6
Past Performance0/6
Financial Health2/6
Dividends0/6

LSAK Stock Overview

Lesaka Technologies, Inc., a financial technology company, engages in the provision of fintech products and services to unbanked and underbanked individuals and small businesses primarily in South Africa and internationally.

Lesaka Technologies Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Lesaka Technologies
Historical stock prices
Current Share PriceUS$3.83
52 Week HighUS$6.97
52 Week LowUS$3.02
Beta1.15
1 Month Change-27.19%
3 Month Change-27.05%
1 Year Change-18.68%
3 Year Change31.62%
5 Year Change-59.21%
Change since IPO-93.65%

Recent News & Updates

Sep 29

Lesaka Technologies: Recent Acquisition Could Imply Larger Valuations

Summary Lesaka offers merchants and consumers in Southern Africa a fintech platform with cash management, payment, and financial services. Further new products and acquisitions, internationalization, and economies of scale from the existing acquisitions could imply a valuation of $9.45 per share. Under my best case scenario, Lesaka would acquire other businesses in South Africa, which would bring significant sales growth and EBITDA margin growth. Lesaka Technologies, Inc. (LSAK) is expected to benefit from the recent acquisition of competitors, and has a massive target market. With other investment advisors, I am also optimistic about the future free cash flow of LSAK mainly from 2024. In my view, transactions may bring economies of scale, more products, and more exposure to new sectors, which will likely lead to revenue growth and free cash flow generation. Yes, there are some risks from the current level of debt, covenant agreements, and failed acquisitions. However, the company remains too cheap at its current market price. Lesaka: Large Market Opportunity Lesaka offers merchants and consumers in Southern Africa a fintech platform with cash management, payment, and financial services. The company targets a massive number of merchants and consumers, and the list of products is overwhelming. Source: Annual Report I think that the market opportunity is massive. The most relevant is that South Africa is a cash-based economy. Close to 59% of the total number of transactions is executed by cash. I believe that products like those of Lesaka will most likely be innovative in the country. It is also worth noting that the company holds a small amount of the target market. Hence, there is significant room for improvement in terms of revenue growth. The following words are from the annual report: We currently have just over 1.1 million active account holders which represents approximately 4% share of our total addressable market. Source: Source: Annual Report Investment Analysts Believe That Lesaka Will Deliver, From 2024, Positive And Growing Free Cash Flow I believe that things are going to get much better for shareholders. Other analysts seem to agree with my vision. Estimates distributed by advisors include 10% sales growth in 2024, 159% sales growth in 2023, and an EBITDA margin close to 6%. Finally, 2024 net income would stand at $2.58 million. Marketscreener.com In my view, the most relevant estimate from analysts is the free cash flow. The expectations include significant free cash flow in 2023 and 2024. I believe that the stock demand will increase as soon as investors do notice the incoming increase in free cash flow. Marketscreener.com I didn’t see Lesaka’s outlook for the full year 2023 and 2024. However, I would note that management expects significant increase in both the EBITDA margin and revenue growth in 2023 Q1. If the EBITDA margin increase continues in 2023, I would say that the expectations of Lesaka would be aligned to those of investment analysts. Source: Presentation Balance Sheet As of June 30, 2022, Lesaka reports $43 million in cash, goodwill worth $162 million, intangible assets of $156 million, and total assets worth $656 million. The asset/liability ratio stands at around 2x, so the balance sheet looks in good shape. With that, let’s note that impairment of goodwill or intangibles could occur, which could rapidly lower the asset/liability ratio. Source: Annual Report Long-term borrowings stand at $134 million, and short-term credit facilities stand at close to $66 million. I believe that the net debt/forward EBITDA would stand at close to 3x-4x. In my view, Lesaka’s net debt does not seem worrying if net sales and free cash flow growth continue in the near future. Source: Annual Report Source: Presentation My Base Case Scenario Implied A Valuation Of $4 Per Share In my view, the recent acquisitions will likely bring new products and access to new sectors in South Africa. The recent acquisition of Connect Group during the year ended June 30, 2022 is a good example of new markets and products. More target markets will likely bring more economies of scale, more revenue, and perhaps FCF margin expansion. Through the introduction of a suite of solutions and technologies targeted at the MSME merchant sector where we were previously under-represented, we can address the needs of approximately 1.4 million informal and approximately 700,000 formal MSMEs in South Africa. Source: Annual Report I believe that Lesaka could obtain significant revenue traction through the acquisition of entities outside South Africa. Let’s notice that the presence of Lesaka in the rest of the world is quite small, which is a pity. In my view, if the know-how accumulated in South Africa is working, it may work in other territories like India, South America, or other parts of Africa. Source: Annual Report Finally, in my view, management will benefit significantly from an increase in communication about its new products to merchants. I believe that many merchants in South Africa and other regions may not be using the company’s products because they are not aware of their existence. Digital wallets, financing of working capital, or cash availability could make a lot of good to certain merchants: On the merchant side, less than 8% of merchants have access to formal credit and less than 4% of informal merchants can accept digital payments. And for consumers, approximately 20% of the estimated 26 million South African consumers in LSM 1-6 have access to credit and savings and a significant majority of the approximately 12 million permanent grant recipients require immediate cash withdrawals of their grant. Source: Annual Report Experts in the assessment of markets believe that the payment processing solutions market size could increase at a CAGR of 11.7% from 2020 to 2027. In this case scenario, I used these figures for the sales growth of Lesaka: Fortune Business Insights, published this information in its latest report, titled, Payment Processing Solutions Market Size, Share Forecast, 2027. The report further mentions that the market stood at USD 48.60 billion in 2019 and is likely to exhibit a CAGR of 11.7% between 2020 and 2027. Source: With 11.7% CAGR, Payment Processing Solutions Market Size

Sep 19

Lesaka rises 8% on full year revenue forecast above estimates

Lesaka Technologies (NASDAQ:LSAK) is trading 8.1% higher after the bell after the company said it expect FY2023 revenue to be above estimates. The company sees revenue for the group between $565M and $600M, way ahead of analysts estimate of $562.92M. The company expects Adjusted EBITDA for the group between $31M and $34M. Merchant business segment Adjusted EBITDA between $31M and $33M.

Shareholder Returns

LSAKUS ITUS Market
7D25.2%5.8%4.4%
1Y-18.7%-33.9%-18.2%

Return vs Industry: LSAK exceeded the US IT industry which returned -35.9% over the past year.

Return vs Market: LSAK exceeded the US Market which returned -20% over the past year.

Price Volatility

Is LSAK's price volatile compared to industry and market?
LSAK volatility
LSAK Average Weekly Movement7.3%
IT Industry Average Movement8.0%
Market Average Movement6.9%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.8%

Stable Share Price: LSAK is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: LSAK's weekly volatility (7%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19972,657Chris Meyerhttps://www.lesakatech.com

Lesaka Technologies, Inc., a financial technology company, engages in the provision of fintech products and services to unbanked and underbanked individuals and small businesses primarily in South Africa and internationally. The company operates through three segments: Consumer, Merchant, and Other. It provides financial services, such as bank accounts, loans, and insurance products.

Lesaka Technologies Fundamentals Summary

How do Lesaka Technologies's earnings and revenue compare to its market cap?
LSAK fundamental statistics
Market CapUS$227.04m
Earnings (TTM)-US$43.01m
Revenue (TTM)US$222.61m

1.0x

P/S Ratio

-5.3x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
LSAK income statement (TTM)
RevenueUS$222.61m
Cost of RevenueUS$168.32m
Gross ProfitUS$54.29m
Other ExpensesUS$97.30m
Earnings-US$43.01m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-0.73
Gross Margin24.39%
Net Profit Margin-19.32%
Debt/Equity Ratio88.5%

How did LSAK perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is LSAK undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LSAK?

Other financial metrics that can be useful for relative valuation.

LSAK key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.8x
Enterprise Value/EBITDA-19.2x
PEG Ration/a

Price to Sales Ratio vs Peers

How does LSAK's PS Ratio compare to its peers?

LSAK PS Ratio vs Peers
The above table shows the PS ratio for LSAK vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPSEstimated GrowthMarket Cap
Peer Average5x
WETG WeTrade Group
14.5xn/aUS$168.0m
CTLP Cantaloupe
1.3x11.7%US$258.4m
SRT Startek
0.2x2.9%US$135.9m
PAYS PaySign
3.9x19.2%US$130.4m
LSAK Lesaka Technologies
1x43.1%US$227.0m

Price-To-Sales vs Peers: LSAK is good value based on its Price-To-Sales Ratio (1x) compared to the peer average (5x).


Price to Earnings Ratio vs Industry

How does LSAK's PE Ratio compare vs other companies in the US IT Industry?

Price-To-Sales vs Industry: LSAK is good value based on its Price-To-Sales Ratio (1x) compared to the US IT industry average (2.5x)


Price to Sales Ratio vs Fair Ratio

What is LSAK's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LSAK PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio1x
Fair PS Ratio3.5x

Price-To-Sales vs Fair Ratio: LSAK is good value based on its Price-To-Sales Ratio (1x) compared to the estimated Fair Price-To-Sales Ratio (3.5x).


Share Price vs Fair Value

What is the Fair Price of LSAK when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LSAK ($3.83) is trading below our estimate of fair value ($5.84)

Significantly Below Fair Value: LSAK is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.


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Future Growth

How is Lesaka Technologies forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

5/6

Future Growth Score 5/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


129.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LSAK is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.9%).

Earnings vs Market: LSAK is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: LSAK is expected to become profitable in the next 3 years.

Revenue vs Market: LSAK's revenue (43.1% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: LSAK's revenue (43.1% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if LSAK's Return on Equity is forecast to be high in 3 years time


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Past Performance

How has Lesaka Technologies performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-21.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: LSAK is currently unprofitable.

Growing Profit Margin: LSAK is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: LSAK is unprofitable, and losses have increased over the past 5 years at a rate of 21.4% per year.

Accelerating Growth: Unable to compare LSAK's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: LSAK is unprofitable, making it difficult to compare its past year earnings growth to the IT industry (19.2%).


Return on Equity

High ROE: LSAK has a negative Return on Equity (-18.68%), as it is currently unprofitable.


Discover strong past performing companies

Financial Health

How is Lesaka Technologies's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Stable Cash Runway

  • Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: LSAK's short term assets ($217.7M) exceed its short term liabilities ($145.9M).

Long Term Liabilities: LSAK's short term assets ($217.7M) do not cover its long term liabilities ($275.8M).


Debt to Equity History and Analysis

Debt Level: LSAK's net debt to equity ratio (69.8%) is considered high.

Reducing Debt: LSAK's debt to equity ratio has increased from 5.7% to 88.5% over the past 5 years.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: LSAK has sufficient cash runway for more than a year based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if LSAK has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


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Dividend

What is Lesaka Technologies's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Lesaka Technologies Dividend Yield vs Market
How does Lesaka Technologies dividend yield compare to the market?
SegmentDividend Yield
Company (Lesaka Technologies)n/a
Market Bottom 25% (US)1.6%
Market Top 25% (US)4.5%
Industry Average (IT)1.6%
Analyst forecast in 3 Years (Lesaka Technologies)n/a

Notable Dividend: Unable to evaluate LSAK's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate LSAK's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if LSAK's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if LSAK's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as LSAK has not reported any payouts.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.4yrs

Average management tenure


CEO

Chris Meyer (51 yo)

1.75yrs

Tenure

Mr. Christopher Guy-Butt Meyer, also known as Chris, has been Group Chief Executive Officer at Lesaka Technologies, Inc. (formerly known as Net 1 UEPS Technologies, Inc.) since July 1, 2021 and serves as i...


Leadership Team

Experienced Management: LSAK's management team is not considered experienced ( 1.4 years average tenure), which suggests a new team.


Board Members

Experienced Board: LSAK's board of directors are not considered experienced ( 1.8 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

NasdaqGS:LSAK Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
30 Sep 22BuyUS$1,743,233Value Capital PartnersCompany505,285US$3.45
29 Sep 22BuyUS$671,849Value Capital PartnersCompany203,005US$3.32
29 Mar 22BuyUS$11,342Value Capital PartnersCompany2,066US$5.49
21 Mar 22BuyUS$274,498Value Capital PartnersCompany55,207US$4.98
20 Dec 21BuyUS$338,870Christopher MeyerIndividual66,500US$5.28
20 Dec 21BuyUS$1,290,581Value Capital PartnersCompany258,830US$5.21
20 Dec 21BuyUS$1,290,844Value Capital PartnersCompany258,830US$5.21
16 Dec 21BuyUS$179,800Value Capital PartnersCompany41,717US$4.31
15 Dec 21BuyUS$662,065Value Capital PartnersCompany148,888US$4.51
13 Dec 21BuyUS$135,154Lincoln MaliIndividual24,006US$5.63
08 Dec 21BuyUS$35,426Lincoln MaliIndividual6,512US$5.51
06 Dec 21BuyUS$217,400Lincoln MaliIndividual42,143US$5.19
17 Nov 21BuyUS$29,684Christopher MeyerIndividual5,226US$5.68
16 Nov 21BuyUS$587,402Christopher MeyerIndividual104,520US$5.62
12 Nov 21BuyUS$41,560Christopher MeyerIndividual7,514US$5.68

Ownership Breakdown

What is the ownership structure of LSAK?
Owner TypeNumber of SharesOwnership Percentage
Individual Insiders1,426,8242.4%
Institutions15,661,34426.4%
VC/PE Firms20,527,11634.6%
General Public21,663,69236.5%

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4%.


Top Shareholders

Top 25 shareholders own 62.95% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
22.2%
Value Capital Partners
13,160,250$50.4m1.57%12.34%
12.43%
International Finance Corporation
7,366,866$28.2m-6.53%2.19%
8.43%
Goldman Sachs Group, Investment Banking and Securities Investments
4,997,411$19.1m-0.08%0.01%
6.41%
Morgan Stanley, Investment Banking and Brokerage Investments
3,802,701$14.6m0.45%no data
3.07%
Kabouter Management, LLC
1,820,314$7.0m0.3%0.4%
2.95%
Potomac Capital Management Inc.
1,750,380$6.7m0.04%8.42%
1.14%
Christopher Meyer
673,862$2.6m-5%no data
1%
Hosking Partners LLP
590,022$2.3m-5.01%0.07%
0.83%
ETF Managers Group LLC
492,618$1.9m40.83%0.05%
0.58%
UBS Asset Management
343,305$1.3m-0.14%no data
0.56%
Lincoln Mali
330,286$1.3m0%no data
0.53%
D. E. Shaw & Co., L.P.
313,713$1.2m-2.08%no data
0.44%
Connor, Clark & Lunn Investment Management Ltd.
262,847$1.0m-1.1%0.01%
0.43%
Group One Trading LP, Asset Management Arm
256,341$981.8k0%0.03%
0.38%
Alexander Michael Smith
226,282$866.7k0%no data
0.32%
Naeem Kola
189,394$725.4k0%no data
0.24%
Renaissance Technologies LLC
143,700$550.4k-0.76%no data
0.18%
Intrepid Family Office LLC
105,901$405.6k0%1.04%
0.15%
Eaton Vance Management
87,900$336.7k0%no data
0.14%
Deutsche Asset & Wealth Management
85,207$326.3k0%no data
0.13%
Aristides Capital, LLC
79,236$303.5k0%0.23%
0.11%
Simplex Trading, LLC, Asset Management Arm
65,318$250.2k39972.39%0.01%
0.11%
Counterpoint Boutique Pty Ltd
63,721$244.1k0%0.21%
0.11%
State Street Global Advisors, Inc.
62,373$238.9k-0.97%no data
0.077%
Susquehanna International Group, LLP, Asset Management Arm
45,829$175.5k0%no data

Company Information

Lesaka Technologies, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Lesaka Technologies, Inc.
  • Ticker: LSAK
  • Exchange: NasdaqGS
  • Founded: 1997
  • Industry: Data Processing and Outsourced Services
  • Sector: Software
  • Implied Market Cap: US$227.038m
  • Shares outstanding: 59.28m
  • Website: https://www.lesakatech.com

Number of Employees


Location

  • Lesaka Technologies, Inc.
  • President Place
  • 4th Floor
  • Johannesburg
  • Gauteng
  • 2196
  • South Africa


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LSAKNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJun 2004
LSKJSE (The Johannesburg Securities Exchange)YesCommon StockZAZARJun 2004
NJPADB (Deutsche Boerse AG)YesCommon StockDEEURJun 2004

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/10/04 00:00
End of Day Share Price2022/10/04 00:00
Earnings2022/06/30
Annual Earnings2022/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.