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new coverage today suntrust r humphries------folks are waking up
worth a re-read: cash is no longer king, folks!---Repay Holdings Sees Enduring Growth Amidst Shelter-In-Place Orders
The world still has plenty of room to transition to digital payments.
Nicholas Rossolillo
Nicholas Rossolillo
(TMFnrossolillo)
May 16, 2020 at 9:30AM
Author Bio
While initially getting clobbered with the rest of the stock market in March, Repay Holdings (NASDAQ:RPAY) stock has rallied and is up about 27% to-date in 2020. The economic lockdown is having a detrimental effect on the performance of many digital payment platforms, and this company's REPAY service is no exception.
However, the company serves industries that are behind the curve in adopting real-time digital transactions -- an area that has become more important than ever during the coronavirus crisis. Thus, the company reported a big uptick in sales in the first quarter of the year, and it thinks business is unlikely to reverse course as the crisis eases.
Q1 by the numbers
REPAY kicked off 2020 with a 58% year-over-year increase in card volume to $3.8 billion. Paired with a handful of acquisitions in the last year, that led to big growth in results, including a 20% increase in organic gross profit growth from its core platform (60% when including acquisitions).
Metric
Q1 2020
Q1 2019
Change
Revenue
$39.5 million
$23.0 million
71%
Gross profit
$28.7 million
$17.9 million
60%
Adjusted EBITDA
$17.4 million
$11.3 million
53%
Adjusted net income
$11.4 million
$8.90 million
28%
EBITDA = EARNINGS BEFORE INTEREST, TAX, DEPRECIATION, AND AMORTIZATION. DATA SOURCE: REPAY HOLDINGS.
While profits not increasing as much as revenue might turn some investors off, it's important to remember REPAY is very small. This is a growth story right now, and bigger bottom-line returns will follow later. As a small outfit operating in the huge digital payments industry, merger and acquisition activity is also still ongoing.
But for now, REPAY's performance in Q1 was pretty good considering the unprecedented situation in which the world now finds itself. According to CEO John Morris, performance in the period included some weakness in repayment activity toward the end of March as lenders and consumers adjusted to the economic shutdown and worked around shelter-in-place orders. That weakness reversed course and things picked up pace again in April.
A woman holding a smartphone and card.
IMAGE SOURCE: GETTY IMAGES.
Deepening reliance on real-time payments
And this is where REPAY could wind up playing a key role for its customers as the world puts the pieces back together post-coronavirus. While real-time digital transactions have grown commonplace in retail and consumer-centric industries (credit and debit card penetration across all industry sales is expected to reach 67% by 2022), card payments are well below average where REPAY plays. Auto and personal loan payments, mortgage payments, and business-to-business transactions are still heavily dominated by cash (physical or check) and ACH (a form of digital transaction, but not a real-time payment as it takes at least a day for transfer).
Taken collectively, there is potentially huge opportunity here. Loan and business-to-business transactions use instant digital payments less than half of the time -- some, like mortgages, only utilize instant digital transfer about 10% of the time. Taken collectively, the sandbox REPAY is working with transacts some $1.1 trillion a year. At an annual revenue run rate just shy of $11 billion, that leaves plenty of room for the small technologist to make some moves and pick up card payment activity.
Of course, there are reasons these industries have been slow on the uptake. Servicing debt with a credit card payment typically isn't allowed. Even when using a debit card to pay off a loan, a loan servicer has to deal with interchange fees for processing the transaction. Utilizing the now legacy ACH technology, though slow, avoids that interchange rate.
But even if ACH holds up, disrupting cash and check is still a big opportunity. The future was already moving away from cash, and now that a pandemic is in the equation, processing physical money went from an increasingly expensive but necessary model to one that possibly may completely fall out of favor with the general public. REPAY is also helping drive down the cost of real-time transactions, making the form of settlement more attractive to businesses. Add to the mix REPAY's Instant Funding service (used for loan funding and other payments to consumers) that taps Visa Direct and Mastercard's networks, and this looks like a well-rounded tech platform geared to help loan providers prepare for the future.
Of course, REPAY's success still depends on it being able to sustain growth, and though it has ample liquidity and positive cash generation to withstand the current crisis, debt is elevated at $241 million. Thus, further acquisitions could require issuing more stock to pay for them. As a reminder, issuance of new stock dilutes ownership of existing shareholders.
Nevertheless, with shares currently trading at 6.2 times trailing 12-month sales, Repay Holdings has a compelling story that deserves some attention as the dust settles from the coronavirus crisis.
you KNOW you're in a winner when they do an "offering" and it climbs right back near 52 week highs-------Looking mighty strong to 25 or even 30. And the warrants should get to 4.00 in no time. And volume, too? Nice eod buy?----------------Trump slight-handed msm at eod with a statement TOTALLY short of their more negative expectations. Next week should be mighty jolly for this fine stock. I like rpayw better. It still moves far better proportionately. GLTA
The "offering" did it------i really like this company, so now we will get an opportunity to ADD AT OUR LEISURE. As always the warrants are where the money opportunity really is. As soon as folks figure out this offering will end up being a positive, i will snap up what folks throw away. PPS target STILL for me in rpayw? 4.00+....and that will be a steal even there maybe. Remember, card companies like rpay and pays offer a safer bet than most----apolitical----not covid-frightening-------and stronger than most in uncertain economic times, too. GROWTH and STILL GROWING.---------------I believe RPAY will bounce back STRONG here soon at some point- erasing this dip----and leaving LONGS with a stronger company anyway.-------------Lower volume sell offs reveal weak hands exiting.I'll be adding to my rpayw going forward. Like i said, it moves proportionately better. GLTA
Yes, but not a lot of action on this board.
no reason warrants can't hit 2.50+ soon---RPAYW has far more bang for our bucks. And folks, PAYS is setting up to be a monster coming, too. Earnings coming soon there. GLTA
$RPAYW: Not sure why they closed the $RPAYW board
That was for the warrants.
Anyways.......... another day and they are on fire again.
Up to $1.68
GO $RPAYW
very encouraging, ebrie! And don't forget RPAYW, too. More bang for your buck. Great find here, ebrie. Thanks.
Great earnings and increased Guidance!
Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY” or the “Company”), a leading provider of vertically-integrated payment solutions, today reported financial results for its third quarter and nine months ended September 30, 2019.
“We are proud of our third quarter results, which included positive contributions from our TriSource acquisition, resulting in year-over-year growth in card payment volume and gross profit of 40% and 39%, respectively,” said John Morris, CEO of REPAY. “We are also thrilled to have recently entered the B2B payments space with the previously-announced acquisition of APS Payments.”
Three Months Ended September 30, 2019 Highlights
Card payment volume was $2.6 billion, an increase of 40% over the third quarter of 2018
Total revenue on a combined basis1 was $41.1 million, an increase of 27% over the third quarter of 2018
Gross profit was $19.4 million, an increase of 39% over the third quarter of 2018
Pro forma net loss1 was ($41.4) million, as compared to net income of $3.7 million in the third quarter 2018
Adjusted EBITDA was $11.9 million, an increase of 29% over the third quarter of 2018
Adjusted Net Income was $10.4 million, an increase of 49% over the third quarter of 2018
Adjusted Net Income per share was $0.18
Nine Months Ended September 30, 2019 Highlights
Card payment volume was $7.3 billion, an increase of 33% over the first three quarters of 2018
Total revenue on a combined basis was $116.5 million, an increase of 21% over the first three quarters of 2018
Gross profit was $54.4 million, an increase of 34% over the first three quarters of 2018
Pro forma net loss was ($32.4) million, as compared to net income of $8.4 million over the first three quarters of 2018
Adjusted EBITDA was $33.7 million, an increase of 24% over the first three quarters of 2018
Adjusted Net Income was $27.1 million, an increase of 31% over the first three quarters of 2018
Adjusted Net Income per share was $0.47
2019 Outlook
The addition of APS Payments is expected to contribute the following to the remainder of 2019:
$500 million in card payment volume
$3.5 million in total revenue
$2.8 million in gross profit
$1.5 million in Adjusted EBITDA
REPAY now expects the below financial results for full year 2019, which reflects expected contributions from APS Payments. The difference between the Previous Guidance and the Updated Guidance is solely related to the contributions from APS.
Full Year 2019 Outlook
Previous Guidance / Updated Guidance
Card Payment Volume
$9.6 - 9.75 billion / $10.1 – 10.25 billion
Total Revenue
$157.0 - 162.0 million / $160.5 – 165.5 million
Gross Profit
$74.0 - 76.0 million / $76.8 – 78.8 million
Adjusted EBITDA
$45.3 - 46.8 million / $46.8 – 48.3 million
Mind if I crash the party? M going to study up a bit on warrant's before I get my toes wet. $TBRG chart looks good. Hoping $RPAYW does the same.
24x7, if you like to play size games, start watching PAYS.
Hey dinogreeves, grabbed 10k yesterday near end of the day. Sold it midday for $2k return, and grabbed it all back same price near end of day today. All based on to charts. I'll do my DD this weekend. Great pick dude. $RPAY HAS ROOM TO MOVE UP.
you have a point. Remember the commercial, "when e.f. hutton talks, people listen"? When our busy friend stops in to talk, i listen. lol
He didn't go anywhere. Just busy as heck and is a mod really necessary here?
since i arrived, ebrie is no longer mod here anymore? I like his input. (sigh)
added more rpayw---------and will continue to add for warrant premium....
it has been my pleasant experience regarding warrants, that that premium or "extra umph" as i call it can be substantial. Moves seen in rpayw now will seem small when rpay gets really going. I'm seeking quite a premium more than 2.00's for rpayw. We'll see. It's nice and quiet here. I added already here once- and will again probably. GLTA
Welcome Mr. D.
4 W's = 100 shares @ 11.50
The way I ffigure, if RPAY is $20 (within 5 yrs) each W is worth $2.125. Without any premium
Me can be Tonto! I swear it. The similarities abound. Whereas you and ebrie are more lone ranger BRAINIACS...i be straight-up peon common sense indian man w/broken-fundamentals english, Tonto. And Tonto says, "we not be alone long now that i'm here."------------------------------------Tonto WILL bring new attention to this new RPAYW idea. Just give-em Tonto time. Tonto very busy in PRFMF he fell in love with- and PAYS he tends to like someone might tend to some garden. FULL DISCLOSURE: I am NOT tonto. I'm half german, half greek...which explains why i can barely get along with myself. (wink)-------------
I be here, boss man. Shakin' the tree, bossman. In with my first sliver. Went with warrants only. More umph! Thanks for the invite! And good to see ebrie, too.
Ebrie, What a pleaswure to be in such good company. I'm going to invite Mr D.
Im with you! Quiet and undercovered, there’s pretty good value here for a payment processor with reasonable growth prospects and strong margins.
Have some shares and some warrants for some extra torque.
E.
nice day, sad to be the Lone Ranger here.
Sold my shares today @ small profit & invested proceeds in Ws.
Much more bang for the buck. IMO
Take a look @PAYS today.
Could RPAY do something similar some day?
WHY NOT???
GLTA (whoever is playing here)
Not for about 5 years
Haven't looked at warrants to see the possibilities. They are usually become worthless.
dino, any opinion re the W's?
This one was SPAC deal, which is blank check company for a reverse merger with a private company. RPAY was Thunder Bridge Resources then they reversed merged with Repay, their peers are Worldpay, Square, and PayPal. This company can grow in leaps and bounds, it should have spiked when the reverse merger was complete, but the shorts have a handle on it so far, it won't too long, with overall market being down it doesn't help it Nasdaq stock too. I am sitting with 3000 shares at 10.50 average. This company will grow tremendously if the market cooperates.
What happened to this one?
Tomorrow this breaks 13 dollars and if my intuition is right on the money, this should really take off on Monday, once 14 and 15 is broken, this will make a huge run.
It's hard to tell at this point, no data. Some say, 1.5 million but I believe it is just under 1 million.
Analyst coverage price target $16.00.
https://seekingalpha.com/news/3477903-btig-initiates-repay-buy
What's the available float on this bad boy?
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