Paya Holdings Inc. (NASDAQ:PAYA) On The Verge Of Breaking Even

Paya Holdings Inc. (NASDAQ:PAYA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Paya Holdings Inc., through its subsidiaries, provides integrated payment and commerce solutions that help customers accept and make payments, expedite receipt of money, and increase operating efficiency. The US$1.4b market-cap company announced a latest loss of US$524k on 31 December 2020 for its most recent financial year result. As path to profitability is the topic on Paya Holdings' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Paya Holdings

Consensus from 7 of the American IT analysts is that Paya Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$14m in 2021. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 50% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Paya Holdings given that this is a high-level summary, but, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Paya Holdings currently has a debt-to-equity ratio of 192%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Paya Holdings, so if you are interested in understanding the company at a deeper level, take a look at Paya Holdings' company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:

1. Valuation: What is Paya Holdings worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Paya Holdings is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Paya Holdings’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.

When trading Paya Holdings or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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