Paysafe (NYSE:PSFE) is a UK based company specializing in processing payments related to gambling. Now that they have gone public through a Special Purpose Acquisition Company (SPAC), PSFE shares are being touted as the best way for you to get into iGaming.
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Of course, the game of play payouts is nothing new. Established processors have had machines in casinos for decades. But what’s different with Paysafe is that the casino comes to you.
Paysafe’s first quarter report says it processed $ 27.7 billion in gaming payments in the March quarter. In addition, he made $ 337.4 million in income and had a net loss of $ 49.1 million. But there is more you need to know about PSFE before moving forward.
Stock PSFE: Want to play?
While Paysafe’s revenue grew only 5% year-over-year (YOY) and its net loss only declined 4%, analysts like InvestorPlace contributor Chris Markoch I love her so much as iGaming and sports betting arrive in the United States. The company’s quarterly report says North American iGaming revenue grew 66% year-on-year. This includes a cryptocurrency launch with Coinbase (NASDAQ:PIECE OF MONEY).
However, it is also important to note that Paysafe’s SPAC transaction was finalized at the end of the quarter. It brought a lot of money to the balance sheet. It also triggered the appointment of a new tip – mainly foreigners and experts in payments or casino affairs. This means that Paysafe has been trading under its current ticker symbol only since April 1. During that time, stocks fell about 17%.
That said, InvestorPlace contributor Thomas Niel attributes this to general fall in PSPCs. Last month, Niel assumed the stock had hit an attractive entry point at around $ 11 per share.
As of June 8, the PSFE share closed at $ 12.08 per share. That’s a market cap of $ 8.74 billion for a company that approximately $ 1.54 billion in revenue for the whole of 2021. In addition, the company recently issued $ 1.02 billion in new debt maturing in 2029 in order to refinance existing debts.
iGaming in the United States
To me, Paysafe looks like a small, specialized transaction processor. They have seen almost no growth since the Covid-19 lockdowns in 2020, as online growth has barely exceeded casino losses.
However, what prompted analysts to beat the table for Paysafe was iGaming himself. It’s been a thing in Europe for a long time, but it still happens in most of the United States because state lawmakers seem reluctant to license. Until now, only 16 states allow some form of online gambling, while only five specifically allow online casinos.
The assumption here is that Paysafe – which is moving operations at from amazon (NASDAQ:AMZN) Amazon Web Services (AWS) Cloud – may navigate new state laws as they are enacted. The addition of cryptocurrency as a payment mechanism is considered the icing on the cake. But can this state-by-state strategy pay off for PSFE stock?
The essentials on the PSFE stock
Currently, the PSFE share is valued at a forward price / sales (P / S) ratio of 5.77, based on growth assumptions. The idea is that states are desperate for new money after closures, and Americans are eager to lose their bed safety paychecks.
Even TV analyst Jim Cramer love Paysafe. This is based on the reputation of the Chairman of the Board of Directors of Paysafe Bill Foley, who Cannae Holdings (NYSE:CNNE) was a early investor in the SPAC which made the PSFE public.
At present, however, the graphics on PSFE remain negative. It is time to think about it. If you’re a young blood who wants some action, however, don’t hesitate to take a look at this stock.
As of the publication date, Dana Blankenhorn held long positions on AMZN. The opinions expressed in this article are those of the author, submitted to InvestorPlace.com Publication guidelines.
Dana blankenhornhas been a financial journalist since 1978. His latest book isThe Big Bang of Technology: Yesterday, Today and Tomorrow with Moore’s Law, technology essays available on the Amazon Kindle store. Follow him on Twitter at@danablankenhorn .
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