Citi Downgrades Repay (RPAY) to Neutral, 'Expectations Reset Highlights More Macro Risk'

Citi analyst Andrew Schmidt downgraded Repay (NASDAQ: RPAY) from Buy to Neutral with a price target of $13.00 (from $19.00).

The analyst comments "We are downgrading RPAY to Neutral. The macroeconomic backdrop reduces visibility in key personal and auto loan repayment verticals (~15-20%/~25% of volume, respectively). Personal loan demand may yet manifest in improved originations, but the company noted mixed trends across clients including tighter credit underwriting that is impacting origination growth and REPAY’s repayment volume – a fast trend revision in 2Q/3Q and a primary reason for the ~7% reduction in the FY22 adjusted EBITDA outlook. In Auto, some credit stress was observed, and also supply/affordability may affect originations (versus strong year-ago performance) – loan durations suggest a delayed impact, but this may constrain forward growth. We like REPAY’s vertical-specific integrated payments expertise and expansion into B2B Payments. However, greater macro risk implies potential for less consistency and lower intermediate-term growth. Risk/reward is balanced at current levels, in our view, and we look for better visibility towards consistently sustained higher levels of growth."

For an analyst ratings summary and ratings history on Repay click here. For more ratings news on Repay click here.

Shares of Repay closed at $12.95 yesterday.

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