Paymentus Holdings, Inc. (NYSE: PAY)

Sector: Technology Industry: Software - Infrastructure CIK: 0001841156
Market Cap 3.75 Bn
P/B 6.98
P/E 63.17
P/S 3.34
ROIC (Qtr) 9.64
Div Yield % 0.00
Rev 1y % (Qtr) 34.19
Total Debt (Qtr) 7.36 Mn
Debt/Equity (Qtr) 0.01

About

Paymentus Holdings, Inc., known by its stock symbol PAY, operates in the electronic bill payment industry. The company is a prominent player in the transformation of how billers and financial institutions interact with their customers, providing a seamless and secure electronic bill payment experience (SEC Filing). The core of Paymentus' business revolves around its cloud-based platform, which is built on a single code base. This platform utilizes artificial intelligence (AI) and machine learning (ML) algorithms to enhance efficiency and extract...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 144.91M provides robust 19.70x coverage of total debt 7.36M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 291.47M provide 129.66x coverage of short-term debt 2.25M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 429.60M provides 58.39x coverage of total debt 7.36M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 108.25M exceeds capital expenditure of 36.66M by 2.95x, indicating strong organic growth funding capability.
  • Tangible assets of 429.60M provide exceptional 66.70x coverage of deferred revenue 6.44M, showing strong service capability backing.

Bear case

  • Operating cash flow of 144.91M barely covers its investment activities of (36.92M), with a coverage ratio of -3.92, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (36.92M) provide weak support for R&D spending of 59.11M, which is -0.62x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating earnings of 75.05M show weak coverage of depreciation charges of 43.49M, with a 1.73 ratio indicating high capital intensity and potential reinvestment needs.
  • Retained earnings of 142.18M provide limited buffer against comprehensive income items of (542000), which is -262.32x, indicating elevated exposure to market risks.
  • Tangible assets of 429.60M provide limited backing for working capital of 321.43M, which is 1.34x, suggesting increased operational risk in market downturns.

Geographical Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,563.59 Bn 33.97 12.13 60.56 Bn
2 ORCL Oracle Corp 561.87 Bn 36.43 9.21 124.39 Bn
3 PLTR Palantir Technologies Inc. 413.65 Bn 377.64 106.17 0.24 Bn
4 PANW Palo Alto Networks Inc 126.45 Bn 113.19 13.23 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 116.42 Bn -370.56 25.50 0.82 Bn
6 SNPS Synopsys Inc 86.06 Bn 64.60 12.20 14.29 Bn
7 NET Cloudflare, Inc. 62.78 Bn -609.27 31.18 3.50 Bn
8 FTNT Fortinet, Inc. 60.83 Bn 32.47 9.28 1.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 5.42 2.69
EV to Cash from Ops. EV/CFO 24.09 28.91
EV to Debt EV to Debt 474.50 19.83
EV to EBIT EV/EBIT 46.51 -9.95
EV to EBITDA EV/EBITDA 31.98 6.82
EV to Free Cash Flow [EV/FCF] EV/FCF 32.25 26.09
EV to Market Cap EV to Market Cap 0.93 0.36
EV to Revenue EV/Rev 3.11 -9.34
Price to Book Value [P/B] P/B 6.98 3.88
Price to Earnings [P/E] P/E 63.17 -10.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -0.30
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.71
Dividend per Basic Share Div per Share (Qtr) 0.00 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.68
Interest Coverage Int. cover (Qtr) 0.00 -14.20
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -1.64 -408.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 52.78 226.39
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.28
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 46.98 25.27
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 41.44 47.48
EBIT Growth (1y) % EBIT 1y % (Qtr) 53.59 20.13
EBT Growth (1y) % EBT 1y % (Qtr) 53.59 14.16
EPS Growth (1y) % EPS 1y % (Qtr) 41.18 67.50
FCF Growth (1y) % FCF 1y % (Qtr) 349.21 296.60
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 25.60 46.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.74 0.67
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 3.05 1.22
Current Ratio Curr Ratio (Qtr) 4.36 2.59
Debt to Equity Ratio Debt/Equity (Qtr) 0.01 -0.96
Interest Cover Ratio Int Coverage (Qtr) 0.00 -14.20
Times Interest Earned Times Interest Earned (Qtr) 0.00 -14.20
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 10.50 -548.16
EBIT Margin % EBIT Margin % (Qtr) 6.68 -199.84
EBT Margin % EBT Margin % (Qtr) 6.68 -607.20
Gross Margin % Gross Margin % (Qtr) 24.80 51.88
Net Profit Margin % Net Margin % (Qtr) 5.30 -610.00