Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on PaySign, Inc. (NASDAQ:PAYS) due to its excellent fundamentals in more than one area. PAYS is a financially-sound company with a strong track record and an optimistic future outlook. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, read the full report on PaySign here.
Outstanding track record with flawless balance sheet
One reason why investors are attracted to PAYS is its notable earnings growth potential in the near future of 40%. The optimistic bottom-line growth is supported by a similarly outstanding revenue growth over the same time period, which indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. PAYS delivered a bottom-line expansion of 86% in the prior year, with its most recent earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in impressive double-digit 32% return to shareholders, which paints a buoyant picture for the company.
PAYS is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that PAYS manages its cash and cost levels well, which is a key determinant of the company’s health. Investors should not worry about PAYS’s debt levels because the company has none! It has only utilized funding from its equity capital to run the business, which is typically normal for a small-cap company. PAYS has plenty of financial flexibility, without debt obligations to meet in the short term, as well as the headroom to raise debt should it need to in the future.
For PaySign, there are three relevant factors you should further examine:
- Valuation: What is PAYS worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether PAYS is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does PAYS return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from PAYS as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of PAYS? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.