Could Paysign $PAYS Form Part Of Your Profitable Retirement Plans?
Paysign Inc (formerly known as 3PEA International Inc) is a business enterprise that deals with the provision of prepaid cards programs and payment processing services or corporate organizations, government organizations and consumers.
The platform is known for creating and enforcing advanced payments solutions, ranging from a wide variety of services which includes; value loading, transaction processing, cardholder account management, cardholder enrolment, customer services and reporting.
The company was founded in 2001 in southern Nevada. Having more than 20 years of experience, the enterprise has developed as a tried and tested provider of tailored card programs to the healthcare and source plasma industries.
The company generates revenue majorly from Plasma card programs and Pharma card programs.
Revenue is the amount of money a company receives from its customers in exchange for the sales of their goods and services.
Revenue from Plasma card programs are generated by agreements with plasma donation centers to offer prepaid cards as an incentive for the donation, the company then generates revenue through fees generated from cardholder fees and interchange fees.
While revenue from Pharma card programs are generated through card program management fees, interchange fees, and settlement income.
Cost of revenues is comprised of,
- transaction processing fees,
- data connectivity and data center expenses,
- network fees,
- bank fees,
- card production costs,
- customer service,
- program management,
- application integration setup,
- and sales and
- commission expense.
As a result of the COVID-19 pandemic, the company’s business, financial condition, profitability and cash flows had a huge negative impact.
Due to the restrictions during the pandemic, both revenue streams were adversely affected.
The company experienced Plasma donation and dollars added to cards at a very slow pace, and Pharma settlement income was not as profitable as the years before.
Share price earnings
During the second quarter of 2020, the per-share earnings were down 80% from 5 cents during the same time the year before, the revenue for the quarter was sitting 25% lower than the $8.64 million in Q2 2019, operated at a loss of $646,161 from an operating income of $1.63 million.
The PaySign earnings report had a net loss at $219,234, which is an unhealthy drop compared to the company’s net income of $1.74 million in the same period of the year before.
PaySign shares were down 28%
However, before the pandemic, analysts had told investors to expect a huge jump of 46% in sales in the second quarter, but instead, PaySign’s revenues declined 26% instead.
Given the uncertainty around the extent and timing of the potential future spread or mitigation of COVID-19, PaySign could not provide investors any guidance as to when things might get better, which made investors very upset.
As the year was coming to an end, some restrictions were lifted in some U.S. states which then had a positive impact on the company’s revenue, hence, resulting in a positive shift on the stock price as we witnessed.
But overall, 2020 was deemed a slow year as stimulus checks were distributed to Americans throughout the year.
As we entered 2021, we expected PaySign’s total revenue to be in the range of $29 million to $32 million according to the statistics, the improving economy helped the recovery of PaySign’s business to some degree.
Here you see a company with potential
PaySign increased the earning potential of their business by adding plasma centers every quarter for the past year with a 22% increase from Q2 2021 over Q2 2020.
However, at the time, the overall revenues of the Plasma industry had not increased as the pandemic had adversely affected the overall plasma donations.
This recovery brought revenues approaching the company’s 2019 peak and proved that demand was developing for their business, thereby returning the company in 2022 to its previous rapid growth.
The company recorded a promising rise in their total revenue through the course of 2021.
As we entered 2022, PaySign recorded a market capitalization of $0.9 billion which moved them up the ranks in the world’s most valuable company.
Market capitalization is the total market value of a publicly traded company’s outstanding shares which is used to measure how much a company is worth.
Here is an analysis of PaySign market capitalization history from 2015 to 2022 according to forecasts;
According to the table, it’s made obvious how the pandemic resulted as a huge negative impact, but then afterwards, PaySign is beginning to show potential and is predicted to increase massively during the long term.
So if you’re wondering on whether to buy now?
Answer is Yes
Risks & Valuations
PaySign stock price is volatile and you may not be able to sell your shares at a price higher than what was paid, their stock price fluctuated between $3.63 and $10.98 in 2020.
The trading price of their common stock was subject to wide fluctuations in response to, among other things,
- quarterly variations in operating and financial results,
- announcements of technological innovations or new products by their competitors, changes in prices of their products and services or their competitors’ products and services,
- changes in product mix, or
- changes in their revenue and
- revenue growth rates.
Their stock price could decline due to the large number of outstanding shares of their common stock eligible for future sale.
Sales of substantial amounts of their common stock in the public market, or even the perception that these sales could occur, could cause the trading price of their common stock to decline.
These sales could also make it more difficult to buy equity or equity-related securities in the future at a time and price that they deem appropriate.
In my opinion,
these risks are worth taking as the business itself is in a stable financial condition with no long-term debt and enough cash to currently cover all non-current liabilities as of the end of 2021.
the outlook of PaySign’s business is bright as revenues should begin to return to pre pandemic levels and overall growth can be anticipated due to the reopening of businesses post lockdowns.
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