Why Paysafe Stock Crashed Today – Motley Fool

Returns as of 11/13/2021
Returns as of 11/13/2021
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Shares of Paysafe (NYSE:PSFE) plunged on Thursday after the payments platform issued a forecast for sales and profit that fell well short of investors’ expectations.
As of 2:15 p.m. EST, Paysafe’s stock price was down more than 40%.
Paysafe’s revenue declined by 1% year over year to $353.6 million. That was significantly below Wall Street’s projections, which had called for revenue of over $370 million. 
Paysafe chalked up the sales decline to weaker-than-expected results in its digital wallet segment, as well as risk management initiatives that led to the loss of some direct marketing customers in its integrated processing division. 
Paysafe’s stock price fell sharply on Thursday. Image source: Getty Images.
All told, Paysafe’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) also fell 1%, to $106.4 million. Its net loss, meanwhile, expanded to $147.2 million, compared to a loss of $38.1 million in the prior-year period, due largely to a $322.2 million impairment charge related to its digital wallet business.
Worse still, Paysafe slashed its full-year financial outlook. Management now expects revenue of roughly $1.48 billion in 2021, down from a prior projection of about $1.54 billion. The company also cut its guidance for gross profit and adjusted EBITDA to approximately $875 million and $430 million, respectively, down from $950 million and $488 million.
Still, CEO Philip McHugh attempted to assure shareholders that Paysafe’s digital wallet operations will recover and that other growth drivers will help the company achieve its long-term goals.
“While the recent trend will drive an adjusted financial outlook, we continue to see strong momentum across the business,” McHugh said in a press release. “Our position to win in high growth and disruptive markets including online sports betting and crypto continues to accelerate, coupled with strong delivery against our cost and technology platform targets.”
However, judging by the sharp decline in Paysafe’s stock price, investors aren’t so sure that McHugh and his team can deliver on their promises.

Discounted offers are only available to new members. Stock Advisor will renew at the then current list price. Stock Advisor list price is $199 per year.
Stock Advisor launched in February of 2002. Returns as of 11/13/2021.
Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Making the world smarter, happier, and richer.

Market data powered by Xignite.


Leave a Reply

Your email address will not be published. Required fields are marked *