Can I please get your opinion on Payfare? Would you rate this a buy or sell and if a buy, at what price do you see as an entry point? If there are a red flag that would prevent you from adding it to your Growth Model Portfolio, what would that be?
Thank you!
PAY is a small-cap fintech company that provides digital banking solutions, and is now trading at 10x times' Forward P/E. Growth was solid in the last few years, and just recently turned to EBIT positive for the first time. The balance sheet is healthy, net cash is around $56M. The company also recently announced some buyback, although not at a huge scale. Based on consensus estimates, sales are expected to grow by around 30% over the next few years. Overall, very solid growth, both historically and expected. This is an interesting stock, with insiders owning 12%. We think it is buyable, preferably in the $6 range. We do not see red flags, and if it delivers on growth expectations could do quite well. It could be considered for a portfolio at some point.