VersaPay’s MasterCard deal earns new $2.30 price target at Haywood

A deal with MasterCard has Haywood Securities analyst Daniel Rosenberg raising his price target on VersaPay (VersaPay News, Stock Quote, Chart TSXV:VPY).

On Tuesday, VersaPay announced a new virtual card receivables deal with MasterCard that will aggregate information for corporate customers in a digital file.

“We are excited to work with a global payments leader like MasterCard,” CEO Craig O’Neill said. “Through our joint initiative, we will improve the experience of accepting virtual credit cards for businesses across the U.S., Canada and around the globe.”

“As more companies turn to virtual card payments, we’re focused on simplifying processes and enhancing the user experience across the ecosystem. Our new virtual card receivables service does just that for suppliers,” Jeff Feuerstein, senior vice-president, commercial products at MasterCard added. “By simplifying card reconciliation, we’re helping suppliers streamline their accounts receivable processes, making data available faster and with the same security and privacy standards we uphold for all MasterCard products and services.”

“We view the partnership with a marquee financial services company as a strong endorsement of VersaPay’s capabilities,” Rosenberg says. “While there was no mention of financial terms, we believe over the medium/long term it will meaningfully broaden VersaPay’s reach with potential to cross-sell additional services in Mastercard’s large customer base.”

In a research update to clients today, Rosenberg maintained his “Buy” rating, but raised his one-year price target on VPY from $2.00 to $2.30, implying a return of 15 per cent at the time of publication.

Rosenberg thinks VersaPay will post Adjusted EBITDA of negative $9.0-million on revenue of $9.7-million in fiscal 2019. He expects those numbers will improve to EBITDA of negative $3.8-million on a topline of $17.2-million the following year.

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