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. Kalkine’s Penny Report covers the Investment Highlights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders:

The top 10 shareholders together form ~30.44% of the total shareholding. Kingsferry Capital Mgmt. Group Ltd. and Janus Henderson Investors [Activist] hold a maximum stake in the company at ~­­­11.54% and ~5.31%, respectively.

1.4 Key Metrics:

On a sequential basis, the company reported substantial growth in revenue and Gross Dollar Value (GDV), as well as an increase in the number of active users. Also, it is consistently clocking healthy gross margins, which is a significant plus. Additionally, the company reported healthy cash flows in Q1 2023, demonstrating its strength and agility.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates: The below picture gives an overview of the company’s recent activity, such as the announcement regarding upcoming financial result.

2.2 Insights on Q1 2023 Financial Performance:

Section 3: Key Risks and Company Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

The stock has witnessed an upside of ~13.03% in 1 month and a downside of ~4.38% over the last 3 months respectively. Moreover, the stock is trading above the average of 52-week high price of CAD 7.44 and 52-week low price of CAD 3.77 providing an opportunity to ride the trend.

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 August 1, 2023. 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.

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Disclaimer

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