Investor Day webcast shortly after Earnings call and words of reassurance:
While we are all not too happy with the share price performance at the moment I have had some time to re-evaluate and here are certain things to consider:
1) Good news and addition clarification is on the horizon through i) The earnings call on the 25th and official release and ii) The investor Day Webcast expected in the 1-2 weeks after the earnings - see the PR of the earnings release date “The Company will announce a webcast similar in format to the webcast conducted in February 2019. The Company will address areas such as Paysign’s history, active markets, and the Company’s growth strategy.” - the Company cannot release much information at the moment and even that press release with prelim numbers was likely them threading lightly to not be in breach of reporting laws. They will be as transparent as possible when they can starting the 25th and on top of that are being pro-active to appease concerns and reiterate their business model through a webcast format with a fully updated investor deck to be expected. This is for both institutional and individual investors which will be great to get the word out.
2) Business model is quite recession proof (barring any crazy forced closures or other force majeures) more people need money now and are out of a job which means more people will go give plasma to get a little cash in their pockets. I would also like to reiterate that giving plasma is not the same as giving blood and these plasma centres continue to have robust volumes (See other publicly listed companies such as Grifols), donors will get paid (using PAYS) and afterwards the blood is tested to make sure it is usable and does not have a virus or other things in it. While some could also argue using plasma from corona patients could be used as a cure, that’s another story... Overall when all companies have reduced earnings we can likely expect continued growth from PAYS.
3)Compelling valuation - now more than ever the company is trading at a ridiculous valuation given its growth profile. Even on conventional TTM PE multiples used for slow growth companies it’s starting to look attractive. Then if you look at projected EV/EBITDA multiples that most analyst are using you would get to a minimum of 10$ (most targets of analyst are between 10-15$)
4) Adding additional financial and technological controls are part of the “growing pains” for a company that has grown quickly and moved up from the OTC exchange to the NASDAQ and it a good thing. While I’m sure they weren’t allowed to elaborate on it for legal reasons until the 25th this is the first comprehensive SOX audit as a NASDAQ listed company which is quite strenuous (knowing from experience) but after the fact we should have more confidence that the company has the proper controls in place to support further growth.
Keep your head up all - it might swing around a little more but I’m hopeful once they’ve prided the additional transparency to the market that it will rebound sharply. Ignore the “ambulance chaser legal firms” they always show up after large stock price drops and never materialize into much.
Cheers,
E.
