H.C. Wainwright analyst Scott Buck maintained a Buy rating on FlexShopper (FPAY – Research Report) today and set a price target of $2.50.
Scott Buck has given his Buy rating due to a combination of factors that signal a strong performance and future potential for FlexShopper. The company surpassed expectations with their first quarter revenue of $33.9M, significantly higher than the anticipated $29.3M. This marks the second consecutive quarter of robust operating results, suggesting a trend of positive business momentum. Additionally, despite flat total fundings from the previous year, FlexShopper benefited from increased origination volumes and new growth initiatives. These include the introduction of retail sales and partnerships with additional financiers, which have started to contribute positively to the company’s bottom line. Buck also notes the company’s success in its B2B2C business and enhanced monetization strategies, which are expected to drive meaningful increases in origination volume in the near future.
Buck’s optimism is further bolstered by FlexShopper’s ability to maintain a strong gross margin of 52.5%, substantially higher than the estimated 46.8%, which, coupled with increased revenues, outweighed higher operating expenses. The resultant adjusted EBITDA of $7.6M far exceeded the $3.8M estimate. Given these solid financials and the anticipation of continued revenue growth, Buck sees the current valuation of FPAY shares—trading at less than 6.0x 2025 adjusted EBITDA estimates—as undervalued. He suggests that this presents an attractive investment opportunity, as he expects further favorable operating results in the second half of 2024 and into 2025. Despite the adjustments to the forecasts for the upcoming years, the price target remains set at $2.50, reaffirming the positive outlook on FlexShopper’s stock.
According to TipRanks, Buck is an analyst with an average return of -14.1% and a 31.12% success rate. Buck covers the Technology sector, focusing on stocks such as SoundHound AI, Inc Class A, Mitek Systems, and AudioEye.
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FlexShopper (FPAY) Company Description:
FlexShopper, Inc. is a holding company, which engages in the provision of furniture, electronics, appliances and other popular brand name goods on lease through its subsidiaries. The company was founded by George F. Rubin, Morry F. Rubin, and Brad Mitchell Bernstein on August 16, 2006 and is headquartered in Boca Raton, FL.
