At US$1.42, Is PaySign, Inc. (NASDAQ:PAYS) Worth Looking At Closely?

While PaySign, Inc. (NASDAQ:PAYS) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the NASDAQCM over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine PaySign’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for PaySign

What's the opportunity in PaySign?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 6.93% above my intrinsic value, which means if you buy PaySign today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $1.33, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, PaySign has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from PaySign?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 81% over the next year, the near-term future seems bright for PaySign. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? It seems like the market has already priced in PAYS’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on PAYS, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Case in point: We've spotted 3 warning signs for PaySign you should be aware of.

If you are no longer interested in PaySign, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.