PAY stock might be the best tech stock you’ve never heard of

These days, with stock market chatter and headlines dominated by just a handful of rising tech stocks, it’s refreshing to come across something new but equally promising. Paymentus Holdings, Inc. NYSE: PAY is a $2.5 billion fintech company based in North Carolina whose stock IPO’d in 2021. They probably couldn’t have picked a worse time, as the early highs they saw quickly succumbed to the brutal sell-off that occurred when technology has exploded.

But the stock has undergone something of a recovery over the past year. After bottoming out from an 80% decline just over a year ago, Paymentus shares have rallied up an impressive 200%. Much of this gain came on March 5, 2024, when a 20% surge sent the stock to new highs, and there are plenty of reasons to think this rally is just getting started.

Excellent earnings and guidance

The catalyst for yesterday’s jump was Paymentus’ fourth-quarter earnings report, which blew away analysts’ expectations. A non-GAAP result of $0.11 per share was 80% higher than consensus, with revenue rising strongly and year-over-year growth of 25%. These were both record numbers for the company, which continues to build a track record of profitability.

However, the outperformance didn’t just stop there, with the company’s EBITDA up more than 95% year-over-year and management indicating there’s more to do. The technology company, which sells bill payment software, is also looking for its first-quarter revenue to beat analysts’ expectations, suggesting that 2024 could be a 2024 to remember for Paymentus and its investors.

Better-than-expected future guidance like this can be one of the best things to see in an earnings report, even more so than key revenue and earnings numbers from the previous quarter. This is because Wall Street, for all its flaws, is forward-looking and will always evaluate a stock based on expected performance rather than the past. So, when a company like Paymentus says it will do much better than expected in the coming months, this means that a fundamental revaluation of the company’s shares must take place, the beginning of which we are already seeing.

Considering the long opportunity

The bullish outlook should however come with a note of caution. Such has been the trend over the last few days that Paymentus shares are starting to look a little frothy and overbought. A Relative Strength Index (RSI) reading of 77 confirms this, so don’t be too surprised if a pullback occurs in the near term. While the stock managed to hold on to most of its gains in yesterday’s session, it failed to close at highs, which would have indicated further gains in the near term. But if anything, this could be a good thing in the long term as it will allow Paymentus stock to consolidate and develop a new level of support.

For starters, look for the stock to stay afloat above the $19 mark. This was the shares’ highest level at the end of last year and is already exactly where they opened a gap-up for yesterday’s session. It’s a key technical level that needs to be held through Friday to maintain confidence in the stock’s ability to continue rising for the rest of the month. But this should be easily achievable with Paymentus shares already trading higher in Wednesday’s pre-market session.

Before you consider Paymentus, you’ll want to hear this.

MarketBeat tracks Wall Street’s highest-rated and best-performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market takes hold… and Paymentus wasn’t on the list.

While Paymentus currently has a “Hold” rating among analysts, top analysts believe these five stocks are better buys.

View the five stocks here

Click the link below and we’ll send you MarketBeat’s list of seven stocks and why their long-term prospects are very promising.

Get this free report