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When Can We Expect A Profit From Paysafe Limited (NYSE:PSFE)?

We feel now is a pretty good time to analyse Paysafe Limited's (NYSE:PSFE) business as it appears the company may be on the cusp of a considerable accomplishment. Paysafe Limited provides digital commerce solutions to online businesses, small and medium-sized merchants and consumers through its Paysafe Network in the United Kingdom, the united States, Germany, and internationally. On 31 December 2022, the US$819m market-cap company posted a loss of US$1.9b for its most recent financial year. Many investors are wondering about the rate at which Paysafe will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Paysafe

Consensus from 6 of the American Diversified Financial analysts is that Paysafe is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$75m in 2024. Therefore, the company is expected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 154% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for Paysafe given that this is a high-level summary, however, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

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One thing we would like to bring into light with Paysafe is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Paysafe, so if you are interested in understanding the company at a deeper level, take a look at Paysafe's company page on Simply Wall St. We've also compiled a list of essential factors you should further examine:

  1. Historical Track Record: What has Paysafe's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Paysafe's board and the CEO’s background.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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