Payoneer (PAYO)

Cross-border payment platform Payoneer (NASDAQ:PAYO) reported Q3 CY2025 results beating Wall Street’s revenue expectations, with sales up 9.1% year on year to $270.9 million. The company’s full-year revenue guidance of $1.06 billion at the midpoint came in 0.9% above analysts’ estimates. Its GAAP profit of $0.04 per share was $0.02 below analysts’ consensus estimates.

Company Overview

Founded during the early days of global e-commerce in 2005 to solve international payment challenges, Payoneer (NASDAQ:PAYO) provides financial technology services that enable small and medium-sized businesses to send and receive payments globally across borders.

Diversified financial services encompass specialized offerings outside traditional categories. These firms benefit from identifying niche market opportunities, developing tailored financial products, and often facing less direct competition. Challenges include scale limitations, regulatory classification uncertainties, and the need to continuously innovate to maintain market differentiation against larger competitors expanding their offerings.

Payoneer competes with other cross-border payment providers like Wise (LSE:WISE), PayPal (NASDAQ:PYPL), and Stripe (private), as well as traditional banks offering international wire transfers and specialized B2B payment platforms such as Flywire (NASDAQ:FLYW) and Adyen (AMS:ADYEN).

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Payoneer grew its revenue at an incredible 25.3% compounded annual growth rate. Its growth surpassed the average financials company and shows its offerings resonate with customers, a great starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Payoneer’s annualized revenue growth of 14.7% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

This quarter, Payoneer reported year-on-year revenue growth of 9.1%, and its $270.9 million of revenue exceeded Wall Street’s estimates by 2.9%.

The aggregate volume of transactions and loan originations processed by financial firms directly impacts their revenue and are fundamental to understanding their growth trajectories.

Payoneer’s volumes have grown at an annual rate of 16.6% over the last five years, better than the broader financials industry but slower than its total revenue. When analyzing Payoneer’s volumes over the last two years, we can see that growth decelerated to 15.9% annually.

Payoneer’s volumes punched in at $22.3 billion this quarter, beating analysts’ expectations by 1.7%. This print was 9.3% higher than the same quarter last year.

The yield on loans and financial instruments represents the interest income earned relative to the total amount of credit extended by financial institutions. This metric measures both revenue generation capacity and the risk profile of a firm's lending activities.

Over the last five years, Payoneer’s yield rose by 35.6 basis points (100 basis points = 1 percentage point). The company’s performance was mostly driven by past improvements as its yield was relatively unchanged on two-year basis at 1.2% in the most recent quarter.

Revenue growth is one major determinant of business quality, and the efficiency of operations is another. For Diversified Financial Services companies, we look at pre-tax profit rather than the operating margin that defines sectors such as consumer, tech, and industrials.

This is because for financials businesses, interest income and expense should be factored into the definition of profit but taxes - which are largely out of a company's control - should not.

Over the last four years, Payoneer’s pre-tax profit margin has fallen by 15.5 percentage points, going from negative 4.5% to 11%. However, fixed cost leverage was muted more recently as the company’s pre-tax profit margin was flat on a two-year basis.

Payoneer’s pre-tax profit margin came in at 11.3% this quarter. This result was 2.4 percentage points better than the same quarter last year.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Payoneer’s full-year EPS flipped from negative to positive over the last five years. This is a good sign and shows it’s at an inflection point.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

Payoneer’s remarkable 16.5% annual EPS growth over the last two years aligns with its revenue trend. This tells us it maintained its per-share profitability as it expanded.

In Q3, Payoneer reported EPS of $0.04, down from $0.11 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects Payoneer’s full-year EPS of $0.19 to grow 48.3%.

Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.

Over the last five years, Payoneer has averaged an ROE of 6%, uninspiring for a company operating in a sector where the average shakes out around 10%. We’re optimistic Payoneer can turn the ship around given its success in other measures of financial health.

The debt-to-equity ratio is a widely used measure to assess a company's balance sheet health. A higher ratio means that a business aggressively financed its growth with debt. This can result in higher earnings (if the borrowed funds are invested profitably) but also increases risk.

If debt levels are too high, there could be difficulties in meeting obligations, especially during economic downturns or periods of rising interest rates if the debt has variable-rate payments.

Payoneer currently has $267.3 million of debt and $750.5 million of shareholder's equity on its balance sheet, and over the past four quarters, has averaged a debt-to-equity ratio of 0.1×. We think this is safe and raises no red flags. In general, we’re comfortable with any ratio below 3.5× for a financials business.

It was encouraging to see Payoneer beat analysts’ revenue expectations this quarter. We were also glad its full-year revenue guidance slightly exceeded Wall Street’s estimates. On the other hand, its EPS was in line. Overall, this quarter could have been better. The stock traded up 4.8% to $6.07 immediately after reporting.

Updated: December 3, 2025 at 11:21 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in Payoneer.

There are several reasons why we think Payoneer is a great business. For starters, its revenue growth was exceptional over the last five years. And while its mediocre ROE lags the market and is a headwind for its stock price, its expanding pre-tax profit margin shows the business has become more efficient. Additionally, Payoneer’s spectacular EPS growth over the last four years shows its profits are trickling down to shareholders.

Payoneer’s P/E ratio based on the next 12 months is 20x. Scanning the financials space today, Payoneer’s fundamentals really stand out, and we like it at this price.

Wall Street analysts have a consensus one-year price target of $8.71 on the company (compared to the current share price of $5.70), implying they see 52.9% upside in buying Payoneer in the short term.