Electronic bill payment solutions network and platform Paymentus Holdings (NYSE:) stock is a 2021 IPO that is still trading above its first-day trading highs. The Company went public through IPO on May 26, 2021, pricing 10 million shares at $21. The stock opened to trade at $28.76 and has managed to stay above that opening price after bottoming out at $26.76. The fintech provider of electronic bill pay services for enterprises has been on a growth spurt. The omnichannel integrated payments platform augments businesses to create and deliver electronic payment options and payments for its end-user customers. It has also grown its Instant Payment Network (IPN) to include hundreds of banks and partners to add a streamlined checkout experience.
The Company should continue to benefit from ecommerce tailwinds that were accelerated by the pandemic. Since most of its payments are related to essential services like utility payments and healthcare, cash flow appears to be predictable. There is lots of competition in the space, but the Company platform is almost considered a legacy player entrenched in the bill pay facilitation ecosystem leveraged by its longstanding relationships. Prudent investors seeking to get exposure in the bill payment segment with a key player can consider opportunistic pullbacks for entry into shares of Paymentus.
According to its website, Paymentus is “changing the way that bills are presented and paid. From local municipalities to Fortune 500s”. The Company makes it “easier to communicate with customers, deliver electronic bills, and receive payments.” The Company was founded in 2004 by CEO Dushyant Sharma. His frustration with the outdated paper bill system created a need that enabled him to create an automated platform to simplify the adoption and use of electronic bill payments. The platform enabled it to grow its large enterprise customers base to over 1,300 billing clients providing over 16 million end users with streamlined e-pay solutions. The Company processed over $38 billion in payments through its network in 2020. Most of these payments from end users were for utilities, healthcare, and financials. The Company generated $236 million in full-year 2019 with an operating profit of $18 million. Revenues rose 28% to $302 million in 2020 with flat operating profits. The Company processed 195 million transactions in 2020 with an average bill around $200. Preliminary Q1 2021 sales are expected to come in at around $92 million, which results in an expect annual run rate of $370 million. Operating income in Q1 2021 was $4.8 million, up more than $1 million in same-period year ago.
The Company is partnered indirectly with PayPal (NASDAQ:) through its Braintree subsidiary. Paymentus back-end is powered by Brain Tree which is now embedded as an option for its own customers to utilize Paymentus front-end app for bill payments. As usual, a line-up of underwriters and analysts gave buy ratings on shares on June 21, 2021. Goldman Sachs (NYSE:) gave a Buy rating with a $54 price target, while Citigroup (NYSE:) initiated a Buy rating with a $35 price target. Bank of America (NYSE:) initiated coverage with a Neutral rating and a $32 price target. Wolfe Research initiated with an Outperform rating with a $37 price target. Raymond James initiated with a $33 price target.
Paymentus Holdings Stock Chart
PAY Opportunistic Pullback Levels
Using the rifle charts on the daily and 60-minute time frames is needed since the newly minted public company still needs time for the indicators to materialize. As with all IPO stocks, the first several months can be attributed to a price discovery period and should be considered high-risk until at least several quarters of earnings reports are released. The daily rifle chart has been in an uptrending with a rising 5-period moving average (MA) support at $33.81 with a rising 15-period MA support at $30.74. The daily formed a market structure low (MSL) buy trigger on the breakout through the $30.03 level. The daily upper Bollinger Band (BB) appears to materialize at $37.02 and the daily lower BBs are at $24.85. The 60-minute rifle chart shows compressing BBs after making a full stochastic oscillation down through the 10-band. The 60-minute lower BBs sit near the $34.47 Fibonacci (fib) level. Prudent investors can watch for opportunistic pullback levels at the $31.52 fib, $29.43 fib, $28.14 fib, $26.76 fib, $23.39 fib, $21.60 fib, and the $19.05 fib. Upside trajectories range from the $42.60 fib up towards the $59.40 fib.
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