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Is This an Overreaction to Paysafe's Earnings?

By Jose Najarro – Nov 12, 2021 at 11:30AM

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Paysafe's stock price dropped over 40% in one day.

Today's video focuses on Paysafe Limited (PSFE 0.58%) and its recent earnings, reported on Nov. 10 after the market closed. Here are some highlights from the video.

  1. Paysafe missed revenue expectations and lowered its full-year guidance, causing a massive sell-off in its stock price. The decline in revenue is due to numerous events: a greater-than-expected drop in its digital wallet segment, the exit of certain clients within its integrated processing segment, and gambling regulations and softness in Europe. 
  2. Despite the setbacks, management is still focusing on its growth segments. In North America, its online gambling revenue has grown 50% year to date. It is important to note that this is still a small portion of Paysafe's revenue. 
  3. Paysafe recently completed its acquisition of PagoEffectivo and Viafintech. These two acquisitions increase Paysafe's market in Latin America and Germany. 

Click the video below for my full thoughts and analysis. 

*Stock prices used were the midday prices of Nov. 11, 2021. The video was published on Nov. 11, 2021.

Jose Najarro owns shares of Paysafe Limited. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Jose is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

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