Critical Analysis: Expensify (NASDAQ:EXFY) and Paysign (NASDAQ:PAYS)

Expensify (NASDAQ:EXFY) and Paysign (NASDAQ:PAYS) are both small-cap business services companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.

Earnings and Valuation

This table compares Expensify and Paysign”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Expensify	$142.10 million	0.74	-$21.39 million	($0.23)	-5.43
Paysign	$91.47 million	4.25	$7.55 million	$0.17	40.88

Paysign has lower revenue, but higher earnings than Expensify. Expensify is trading at a lower price-to-earnings ratio than Paysign, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Expensify and Paysign’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Expensify	-14.68%	-15.26%	-10.96%
Paysign	11.38%	21.74%	4.19%

Insider and Institutional Ownership

68.4% of Expensify shares are owned by institutional investors. Comparatively, 25.9% of Paysign shares are owned by institutional investors. 11.7% of Expensify shares are owned by company insiders. Comparatively, 24.5% of Paysign shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Expensify and Paysign, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Expensify	1	1	0	0	1.50
Paysign	0	1	2	0	2.67

Expensify presently has a consensus price target of $2.50, suggesting a potential upside of 100.00%. Paysign has a consensus price target of $10.00, suggesting a potential upside of 43.88%. Given Expensify’s higher possible upside, research analysts clearly believe Expensify is more favorable than Paysign.

Volatility & Risk

Expensify has a beta of 1.79, suggesting that its share price is 79% more volatile than the S&P 500. Comparatively, Paysign has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500.

Summary

Paysign beats Expensify on 10 of the 14 factors compared between the two stocks.

About Expensify

Expensify, Inc. provides a cloud-based expense management software platform to individuals and corporations, small and midsized businesses, and enterprises in the United States and internationally. The company’s platform enables users to manage corporate cards, pay bills, generate invoices, collect payments, and book travel. It also offers track and submit plans for individuals. The company was founded in 2008 and is based in Portland, Oregon.

About Paysign

Paysign, Inc. provides prepaid card programs, comprehensive patient affordability offerings, digital banking services, and integrated payment processing services for businesses, consumers, and government institutions. Its product offerings include solutions for corporate rewards, prepaid gift cards, general purpose reloadable debit cards, employee incentives, consumer rebates, donor compensation, clinical trials, healthcare reimbursement payments and pharmaceutical payment assistance, and demand deposit accounts accessible with a debit card. The company markets its prepaid card solutions under the Paysign brand. Its primary market focus is on companies and municipalities that require a streamlined payment solution for rewards, rebates, payment assistance, and other payments to their customers, employees, agents, and others. The company was formerly known as 3PEA International, Inc. and changed its name to Paysign, Inc. in April 2019. Paysign, Inc. was incorporated in 1995 and is headquartered in Henderson, Nevada.