Repay’s 2020 Sales Outlook Misses The Street; BTIG Sticks To Buy

Repay Holdings Corp. expects to generate revenues in the range of $148 million to $153 million for the full-year 2020, falling short of the Street consensus of $154.89 million. Meanwhile, the integrated payment processing solutions provider’s 3Q revenues jumped 43% year-over-year to $37.6 million and just about surpassed the consensus estimates of $36.62 million. The company’s card payment volume surged 44% year-over-year.

Repay Holdings’ (RPAY) 3Q earnings of $0.12 came ahead of analysts’ estimates of $0.11 but declined 33.3% from the year-ago quarter. The company’s gross profit increased 40% year-over-year, while adjusted EBITDA grew 31% in 3Q during the same period.

The company completed the $93 million cash acquisition of CPS Payment Services on Nov. 2, which was announced on Oct. 27. Repay Holdings’ CEO John Morris said that “We are thrilled by our latest acquisition of CPS Payment Services, which fortifies our B2B [business-to-business] and AP [accounts payable] automation offering and will help us satisfy the heightened demand for comprehensive, technology-first B2B automation and payment solutions.”

As for 2020, the company anticipates card payment volume to be in the range of $14.75 to $15.00 billion. RPAY expects 2020 gross profit in the range of $110 to $113 million and adjusted EBITDA in the range of $63 to $65 million. (See RPAY stock analysis on TipRanks)

On Nov. 10, BTIG analyst Mark Palmer reiterated his Buy rating on the stock with a price target of $31 (17% upside potential), citing strong 3Q report highlighted by revenue and earnings beat and card volume growth of 44%. Palmer said that the upbeat 3Q results have put “Repay in position to extend share price momentum.”

Currently, the Street shares Palmer’s bullish outlook. The Strong Buy analyst consensus is based on 4 Buys and 1 Hold. The average price target of $28.40 implies upside potential of about 7.2% to current levels. Shares have rallied by about 80.8% year-to-date.

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