Section1: Company Overview and Fundamental Insights:

1.1 Company Overview:

Payfare Inc (TSX: PAY) is a global fintech company offering mobile banking, instant payment, and loyalty-reward solutions. Its financial technology platform is providing financial inclusion and empowerment to next-generation workers around the globe with a full-service mobile bank account and debit card with instant access to their earnings and relevant cash-back rewards. Some brands that use Payfare include Lyft, Uber, and DoorDash. Its geographical segments are Canada, the United States, and Mexico.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 5 Shareholders:

The top 5 shareholders together form ~24.67% of the total shareholding. Kingsferry Capital Mgmt. Group Ltd. and McKenzie (Keith) hold a maximum stake in the company at ~­­­11.87% and ~4.80%, respectively.

1.4 Key Metrics:

The company reported robust growth in its revenue and Gross Dollar Value and witnessed elevated number of active users on the sequential basis. Furthermore, it is clocking continuous improvement in its gross margins, which is a key positive. Additionally, the company is reporting lower cash cycle days, below an industry median in Q2 2022, are another key positive and demonstrates its strength and adaptability.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates: The below picture gives an overview of its recent activities, such as announcement regarding change in management and shares repurchased under NCIB program.

2.2 Insights of Q2 2022 Financial Performance:

Section 3: Key Risks and Company Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

4.2 Fundamental Valuation

Valuation Methodology: EV to Sales Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is September 27, 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Disclaimer

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