Raymond James Upgrades Paymentus (PAY) to Strong Buy

Raymond James analyst John Davis upgraded Paymentus (NYSE: PAY) from Outperform to Strong Buy with a price target of $35.00 (from $41.00).

The analyst commented: "We are upgrading Paymentus (PAY) to Strong Buy from Outperform and adding it to the Analyst Current Favorites® list, as we believe the recent pullback in the stock (-30% vs. Russell 2000 +13% last 3 months) has created an asymmetric risk/reward. Importantly, we anticipate strong 4Q results and see the potential for mid-single digit percent upside to contribution profit (CP) dollars and adj. EBITDA. Moreover, while we expect the initial FY26 outlook will likely bracket the Street across all key metrics, we believe this will prove too conservative and see a path for mid single digit CP $ upside and high-single digit adj. EBITDA upside in 2026 as the year progresses. In addition, although the most likely case is that management executes and the stock moves materially higher, our LBO math suggests a low-to-mid 20% IRR at a $30-35 takeout price. Simply put, we remain confident in the durability of growth (RJe MSD market share), upside to estimates, and see takeout optionality. As such, with the stock now trading at 13x our bull case 2027 adj. EBITDA despite 20%+ growth and a pristine balance sheet, we are moving to Strong Buy."

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

Shares of Paymentus closed at $24.45 yesterday.

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