Investors with an interest in Financial Transaction Services stocks have likely encountered both Payoneer Global Inc. (PAYO) and Visa (V) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis o ...

Financial Performance - Payoneer reported a 21% increase in transaction volume to $80.1 billion and an 18% increase in revenue to $977.7 million for the year ended December 31, 2024, compared to 2023[22]. - Revenues typically increase in the fourth quarter due to higher e-commerce sales during the holiday season, indicating seasonal fluctuations in revenue[52]. - The company recorded a net loss of $12.0 million for the year ended December 31, 2022, despite achieving net income in 2023 and 2024[143]. - Approximately 35% of the company's revenue for the year ended December 31, 2024, was generated from customers in Greater China[202]. Market Opportunities - The global e-commerce and service marketplace payouts business represents a $300 billion volume opportunity, while B2B SMBs represent a $6 trillion volume opportunity[37][38]. - The global B2B e-commerce volume is projected to reach $36 trillion by 2026, with significant growth expected in Asia Pacific, Latin America, and the Middle East[24]. - Payoneer is focused on encouraging existing customers to expand their use of its products and services to drive growth[142]. Customer Base and Operations - Payoneer has approximately 2 million active customers, with over 500,000 fitting the ideal customer profile, processing an average of over $500 monthly[49]. - Payoneer operates in over 190 countries, supported by regional sales and customer support hubs to enhance customer relationships[32]. - The company is working to acquire a locally licensed non-bank payments institution in China, with the transaction expected to close in the first half of 2025[56]. Compliance and Regulatory Risks - Payoneer is subject to extensive and complex regulations, including those related to anti-money laundering and customer verification, which may change frequently[56]. - The company has applied for various licenses, including a Payment Aggregator Cross Border license in India and a payment service provider license in Israel, to enhance its regulatory compliance[55]. - Compliance with anti-money laundering and similar regulations is essential, with failure to comply potentially resulting in penalties and increased operational costs[195]. - The company must continually update its compliance program in response to evolving regulations, which may increase costs and operational complexity[196]. Employee and Corporate Culture - The company emphasizes employee wellness and development, offering programs like a Global Employee Assistance Program and a Top Talent leadership development initiative[72][73]. - Payoneer has a total rewards strategy aimed at attracting and retaining talent, focusing on equitable compensation and benefits[74]. - The company has held its third Global Week of Good in 2024, with participation from employees in 18 countries[75]. Risks and Challenges - The company faces substantial competition in the financial services and payments industry, which could adversely affect margins and results[91]. - Cybersecurity vulnerabilities and operational disruptions could result in significant financial losses and damage to the company's reputation[97]. - The company is exposed to risks associated with changes in interest rates, which could negatively impact the market value of time deposits and U.S. Treasury Securities[99]. - The ongoing conflict in Israel, which began on October 7, 2023, could adversely affect the company's operations and revenues, although revenues from Israeli customers were insignificant for the year ended December 31, 2024[105]. Technology and Innovation - The company must continuously innovate and respond to technological changes to remain competitive, with significant investment required for new product development[85]. - The company has invested in improving its platform to offer new features, but the success of these initiatives is uncertain and critical for future growth[142]. Financial Management - The company funds its Working Capital products through balance sheet cash, but faces risks related to the availability of capital for these products[174]. - Future capital needs may require the company to seek additional financing, which may not be secured on favorable terms, potentially limiting growth and operational flexibility[175]. - The company's Working Capital products, primarily merchant capital advances, are subject to collection risk and regulatory risk, with adverse macroeconomic conditions potentially leading to lower receivables and extended repayment periods[172]. Intellectual Property and Data Protection - Payoneer relies on a combination of trade secrets, trademarks, and confidentiality agreements to protect its intellectual property, with no issued patents[76][78]. - The company is subject to evolving regulations regarding privacy and data protection, which may require substantial modifications to data processing practices[210]. - Non-compliance with data protection laws could result in fines up to the greater of €20 million or 4% of total global annual turnover[211]. Economic and Environmental Factors - Inflation has negatively impacted the purchasing power of consumers, potentially affecting the growth of the e-commerce market and the company's earnings[139]. - The company faces risks related to climate change and environmental issues, which could disrupt operations and increase compliance costs[218].

This presentation does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any security. You should not construe the contents of this presentation as legal, tax, accounting or investment advice or a recommendation. Forward-Looking Statements Certain statements in this presentation may be considered "forward- looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-look ...

Payoneer Global Inc. (NASDAQ:PAYO) Q4 2024 Earnings Conference Call February 27, 2025 8:30 AM ET Company Participants Caius Slater - Director, Investor Relations John Caplan - Chief Executive Officer Bea Ordonez - Chief Financial Officer Conference Call Participants Sanjay Sakhrani - KBW Nate Svensson - Deutsche Bank Will Nance - Goldman Sachs Cris Kennedy - William Blair Spencer James - Jefferies Daniel Krebs - Wolfe Research Operator Good morning. Thank you for standing by. Welcome to Payoneer's Fourth Qu ...

Core Insights - Payoneer Global Inc. reported quarterly earnings of $0.05 per share, missing the Zacks Consensus Estimate of $0.07 per share, representing an earnings surprise of -28.57% [1] - The company posted revenues of $261.74 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 8.24% and showing an increase from $224.32 million year-over-year [2] - Payoneer Global has outperformed the market with a 1.4% increase in shares since the beginning of the year, compared to the S&P 500's gain of 1.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.06 on revenues of $241.92 million, and for the current fiscal year, it is $0.37 on revenues of $1.02 billion [7] - The estimate revisions trend for Payoneer Global is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Financial Transaction Services industry, to which Payoneer Global belongs, is currently in the top 31% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Another company in the same industry, Ryvyl, is expected to report a quarterly loss of $0.29 per share, with revenues projected to decline by 32.8% year-over-year [9]

Financial Performance - Payoneer achieved a record annual volume of $80 billion, reflecting a 21% year-over-year growth[6]. - Revenue for 2024 reached $977.7 million, representing an 18% increase compared to 2023[2]. - Net income for Q4 2024 was $18.2 million, a decrease of 33% year-over-year, while full-year net income increased by 30% to $121.2 million[2][5]. - Adjusted EBITDA for 2024 was $270.6 million, up 32% from the previous year[2]. - Revenues for Q4 2024 reached $261.739 million, a 16.7% increase from $224.320 million in Q4 2023[21]. - Total revenues for the year 2024 were $977.716 million, up 17.6% from $831.103 million in 2023[21]. - Operating income for Q4 2024 was $29.184 million, compared to $25.706 million in Q4 2023, reflecting a 9.7% increase[21]. - Adjusted EBITDA for Q4 2024 was $63.271 million, an increase of 21.5% from $52.245 million in Q4 2023[27]. - Revenue recognized from contracts with customers for Q4 2024 was $198.233 million, a 26.4% increase from $156.774 million in Q4 2023[22]. - Interest income on customer balances for Q4 2024 was $60.595 million, a decrease of 6.5% from $64.867 million in Q4 2023[22]. - Greater China contributed $89.938 million in revenue for Q4 2024, up 12.5% from $80.244 million in Q4 2023[24]. Customer and Market Growth - The company reported a 42% year-over-year growth in B2B volume, reaching $3.0 billion[6][12]. - Active Ideal Customer Profiles (ICPs) grew by 8% year-over-year, totaling 560,000[6]. Future Projections - Payoneer plans to achieve revenue guidance of $1,040 million to $1,050 million for 2025[11]. Expenses and Liabilities - The company reported total operating expenses of $232.555 million for Q4 2024, compared to $198.614 million in Q4 2023, representing a 17.1% increase[21]. - Total current liabilities rose to $7.13 billion in 2024, up from $6.54 billion in 2023, indicating an increase of 9.0%[33]. Assets and Cash Flow - Total assets increased to $7.93 billion in 2024 from $7.28 billion in 2023, reflecting a growth of 8.9%[33]. - Cash and cash equivalents decreased to $497.47 million in 2024 from $617.02 million in 2023, a decline of 19.4%[33]. - Net cash provided by operating activities for 2024 was $176.93 million, compared to $159.49 million in 2023, representing a growth of 10.9%[35]. - Net cash used in investing activities significantly increased to $1.96 billion in 2024 from $44.25 million in 2023[35]. Shareholder Information - The weighted average common shares outstanding for diluted earnings per share was 385,074,151 for Q4 2024, compared to 379,881,231 for Q4 2023[21]. - Basic earnings per share for Q4 2024 was $0.05, down from $0.08 in Q4 2023, while diluted earnings per share decreased from $0.07 to $0.05[31]. - Total shareholders' equity increased to $724.79 million in 2024 from $664.27 million in 2023, a rise of 9.1%[33]. Tax and Other Financial Activities - Cash paid for taxes in 2024 was $52.32 million, compared to $40.91 million in 2023, reflecting a 28.0% increase[35]. - The company reported a loss on Warrant repurchase/redemption of $19.83 million in 2024, with no such loss reported in 2023[35]. Strategic Initiatives - The company implemented strategies to reduce sensitivity to interest rate fluctuations, with $1.8 billion of customer funds invested in US treasury securities[12]. - Payoneer acquired Skuad, enhancing its financial stack for SMBs operating internationally[12]. - The company reported a record $1.5 billion in spend on Payoneer cards, a 36% increase year-over-year[12].

Core Viewpoint - Payoneer (PAYO) is set to report its fourth-quarter 2024 results on February 27, with expectations of revenue growth and improved earnings per share compared to the previous year [1][5]. Revenue Expectations - The Zacks Consensus Estimate for Payoneer's Q4 2024 revenues is $241.8 million, reflecting a 7.8% year-over-year increase, driven by growth in B2B, International Commercial Partners (ICP), and marketplace segments [3]. - Revenue growth is also anticipated from the adoption of card products, pricing initiatives, and high-interest income due to increased customer funds on the platform [4]. Earnings Projections - The consensus estimate for Payoneer's earnings in Q4 2024 is 7 cents per share, indicating a 40% year-over-year rise, supported by robust top-line growth, strong margins, and disciplined expense management [5]. - However, the current Earnings ESP for Payoneer is -31.49%, and it holds a Zacks Rank of 3 (Hold), suggesting uncertainty regarding an earnings beat this quarter [6][7].

Company Overview - Payoneer Global Inc. (PAYO) is expected to report a year-over-year increase in earnings, with a projected EPS of $0.07, reflecting a +40% change, and revenues anticipated at $241.82 million, up 7.8% from the previous year [3][12]. Earnings Expectations - The upcoming earnings report is scheduled for February 27, and the stock may rise if actual results exceed expectations, while a miss could lead to a decline [2][12]. - The consensus EPS estimate has been revised 1.95% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for Payoneer is lower than the consensus estimate, resulting in an Earnings ESP of -31.49%, suggesting a bearish outlook [10][11]. - Despite the negative Earnings ESP, the stock holds a Zacks Rank of 3, making it challenging to predict an earnings beat conclusively [11]. Historical Performance - In the last reported quarter, Payoneer exceeded the expected EPS of $0.04 by delivering $0.11, resulting in a surprise of +175% [12]. - Over the past four quarters, the company has beaten consensus EPS estimates three times [13]. Industry Comparison - Global Blue Group Holding AG (GB), another player in the financial transaction services industry, is expected to report an EPS of $0.09, reflecting a +125% year-over-year change, with revenues projected at $133.59 million, up 13.4% [17]. - The consensus EPS estimate for Global Blue has been revised down by 20% in the last 30 days, and it currently has an Earnings ESP of 0.00%, indicating uncertainty in beating the consensus [18].

Core Viewpoint - The Zacks rating system provides a more balanced approach to stock ratings, maintaining an equal proportion of 'buy' and 'sell' ratings, with only the top 20% of stocks receiving favorable ratings, indicating strong earnings estimate revisions and potential for market-beating returns [1][2]. Company Summary - Payoneer Global Inc. (PAYO) has been upgraded to a Zacks Rank 1 (Strong Buy), reflecting an upward trend in earnings estimates, which is a significant factor influencing stock prices [4][5]. - The recent rating upgrade for Payoneer Global suggests a positive outlook on its earnings, likely leading to an increase in its stock price [5][6]. - Over the past three months, analysts have raised their earnings estimates for Payoneer Global, with the Zacks Consensus Estimate increasing by 41.4% [8]. - The company is projected to earn $0.35 per share for the fiscal year ending December 2024, representing a year-over-year change of 45.8% [13]. - The upgrade positions Payoneer Global in the top 5% of Zacks-covered stocks based on estimate revisions, indicating potential for near-term stock price appreciation [18]. Industry Insights - The Zacks Rank stock-rating system, which categorizes stocks based on earnings estimate revisions, has shown a strong track record, with Zacks Rank 1 stocks averaging an annual return of +25% since 1988 [7]. - The correlation between earnings estimate revisions and stock price movements is well-established, making the Zacks rating system a valuable tool for investors [10][12]. - Institutional investors often rely on earnings estimates to determine a stock's fair value, influencing their buying and selling decisions, which in turn affects stock prices [11].

Core Viewpoint - Investors in Payoneer Global Inc. (PAYO) should closely monitor the stock due to significant movements in the options market, particularly the high implied volatility of the Jan. 17, 2025 $5 Put option [1] Company Analysis - Payoneer Global is currently rated as a Zacks Rank 2 (Buy) within the Technology Services industry, which is in the top 27% of the Zacks Industry Rank [3] - Over the past 60 days, three analysts have raised their earnings estimates for the current quarter, resulting in an increase of the Zacks Consensus Estimate from 4 cents per share to 8 cents per share [3] Options Market Insights - The high implied volatility surrounding Payoneer Global shares indicates that options traders are anticipating a significant price movement, which could suggest an upcoming event that may lead to a substantial rally or sell-off [2][4] - Seasoned options traders often seek out options with high implied volatility to sell premium, aiming to benefit from the decay of the option's value if the underlying stock does not move as much as expected by expiration [4]