Loss-Making Paysafe's Earnings And Shareholder Returns Follow Downward Trajectory Over Year

Paysafe Limited (NYSE:PSFE) shareholders will doubtless be very grateful to see the share price up 58% in the last month. But that isn't much consolation to those who have suffered through the declines of the last year. During that time the share price has sank like a stone, descending 56%. Some might say the recent bounce is to be expected after such a bad drop. Arguably, the fall was overdone.

On a more encouraging note the company has added US$79m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.

See our latest analysis for Paysafe

Paysafe isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Paysafe's revenue didn't grow at all in the last year. In fact, it fell 0.09%. That's not what investors generally want to see. The share price drop of 56% is understandable given the company doesn't have profits to boast of. Fingers crossed this is the low ebb for the stock. We don't generally like to own companies with falling revenues and no profits, so we're pretty cautious of this one, at the moment.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

This free interactive report on Paysafe's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We doubt Paysafe shareholders are happy with the loss of 56% over twelve months. That falls short of the market, which lost 13%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. Putting aside the last twelve months, it's good to see the share price has rebounded by 11%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Paysafe , and understanding them should be part of your investment process.

We will like Paysafe better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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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.