Paysign Inc (PAYS)

[chilar4567]

Next 12 Month Target Valuation - March, 2018:

You will find below my forecast for 3Pea's 2018FYE and the assigned valuation over the next 12 months based on 3 different types of multiples.

2018 Financial Forecast:

Revenue: (45% growth) ~22M
Gross margins: 46% ~10.2M
SG&A as a % of revenue 26% ~ 5.75M
D&A and other: ~1M
EBITDA:4.42M
NI: 3.42M
F.d. share Count: ~47M
EPS: 0.073
Cash balance: ~5M (assumes we add another 2.3M this year, very obtainable per cash flow - but depends on capex spend)
LT debt:0$
**all multiples come from S&P capital IQ from companies in a similar industry - excluded larger entities that skew results to remain conservative.

Method 1 - EV/Sales:

EV/Sales Multiple:5.5x
Equity Value of ~126.5M (EV of 121M including 5M of cash) -
Share Value: 2.69$


Method 2 - EV/EBITDA:

EV/EBITDA Multiple:17.1x

Equity Value of 80.5M - Share Value: 1.71$

Method 3 - P/E:

P/E Multiple: 27.9x

Share Value: 2.03$

The average of the above methods gives us 2.14$/share.

Based on my analysis, it is well within reach for the Company to trade upwards of 2$/share. This is especially true as they look to uplist which should attract more investors and increase liquidity. Valuation could increase further if the Company grows even faster than 45% (as they did 46.5% this past year and it appears as they could do more per their press release). There is also significant consolidation in this space and 3Pea's high growth rate could attract a few suitors as they look to uplist (in this case 3-5$ is not an impossibility).



Best of luck!

E.