Payfare (PAY) has been active in Q3 expanding it's usability by using customer apps.It made 3 partnerships that potentially will increase it's active user count and hence revenues.Principally it made a deal to allow instant access to Doordash delivery drivers plus a 2% cashback on every gas purchase.It made a deal to allow international money transfers from Payfare.And it made it clearer that there would be no monthly fees nor minimum account balance required.
Q3 Highlights
Active user count increased by 37% over Q2 2021 which also had a healthy increase.This resulted in Q3 revenues of $12.7 million for a 286% increase over Q3 2020 and a 46% increase over Q2 2021.This produced a $606,000 gross profit and allowed PAY to completely pay off it's loan facility.In addition, Payfare made a partnership with a company called Plaid that allowed it to interconnect with any app.Although this blog feels that the gain in active user account of 37% was quite favorable it needs another 25% gain in active user account in the next quarter.Some revenue increase will be made by a gain the velocity of present users.But this blog feels that Payfare must expand it's customer base beyond the GIG economy. Forecast for Q4
Payfare had an increase in revenues from Q2 to Q3 of about 46%.This brought revenues to $12.7 million. And if Payfare is able to expand it's active user account by perhaps 25% and increase it's usage velocity this blog feels that revenues may hit $15.5-$16 million in Q4.But this will likely require Payfare to make one or two new partnerships.And this will bring annual revenues to about $50 million plus net income will then approach being positive.This will probably send the PAY share price to $10.But if the active user account only shows a small percentage increase and there is a small increase in velocity this blog feels that Payfare will stay in a range between it's present level and $9 a share.
Dale Mcintyre M.S.Sc.(Econ) is a freelance writer associated with Zacks Research and the Woodbridge Group.Zacks Investment Research: Stock Research, Analysis, MarketBeat: Stock Market News and Research Tools
