DA Davidson Reiterates Buy Rating on Paysign Inc. (PAYS)

DA Davidson analyst Peter Heckmann reiterated a Buy rating and $6.00 price target on Paysign Inc. (NASDAQ: PAYS).

The analyst comments "This morning, Paysign announced the acquisition of Gamma Innovation LLC to complement the company’s capabilities in plasma donor and pharmaceutical patient engagement technologies. As part of the acquisition, Paysign has appointed Michael Ngo, former Managing Member of Gamma, as its Chief Innovation Officer. Gamma’s solutions include a donor engagement app, a customer resource management (CRM) platform tailored specifically for the blood and plasma collection industry, and other donor management solutions targeted to the blood and plasma collection industry’s donor engagement/management ecosystem. Gamma also has an existing contract with a Paysign customer. Terms of the deal were not disclosed, and we will be looking to management for additional details. Paysign ended 3Q24 with $10.3M in unrestricted cash, $100.2M of restricted cash related to ongoing programs, and no debt. Paysign is scheduled to report 4Q results after the close today with a conference call planned for 5pm ET. We expect the company will meet (or modestly exceed) our forecasts for the quarter. With 3Q24 results, management affirmed their prior 2024 financial guidance, despite an expectation of some one-time costs in the 4Q related to a legal settlement. Full year guidance included 20%-24% Y/Y growth in total revenue to $56.5M-$58.5M and 34%-49% Y/Y growth in adjusted EBITDA to $9M-$10M. For the year, management’s guidance suggests adjusted EBITDA margins should increase 170bp-190bp Y/Y to 15.9%-17.1%. With results, we expect management will introduce their 2025 guidance. For 2025, we are forecasting 11% Y/Y growth in total revenue to $64.7M and an 18% Y/Y increase in adjusted EBITDA to $11.3M. After a strong rebound in revenue per center in the three years since the pandemic-related drop, we expect relatively slow growth in the Plasma segment in 2025. However, we suspect our 2025 forecasts for the Pharma segment may prove conservative, given recent momentum in the segment. We are maintaining our BUY rating on Paysign with a $6 price target, which represents an enterprise value of 25 times our 2026 adjusted EBITDA forecast of $13.2M."

For an analyst ratings summary and ratings history on Paysign Inc. click here. For more ratings news on Paysign Inc. click here.

Shares of Paysign Inc. closed at $2.52 yesterday.

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