Payoneer (PAYO)

Cross-border payment platform Payoneer (NASDAQ:PAYO) fell short of the market’s revenue expectations in Q4 CY2025 as sales rose 4.9% year on year to $274.7 million. The company’s full-year revenue guidance of $1.11 billion at the midpoint came in 1.7% below analysts’ estimates. Its GAAP profit of $0.05 per share was in line with 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).

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Payoneer grew its revenue at an incredible 26.3% 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.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Payoneer’s annualized revenue growth of 12.5% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

This quarter, Payoneer’s revenue grew by 4.9% year on year to $274.7 million, falling short of Wall Street’s estimates.

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.

Interest income and expenses play a big role in financial institutions' profitability, so they should be factored into the definition of profit. Taxes, however, should not as they are largely out of a company's control. This is pre-tax profit by definition.

Over the last five years, Payoneer’s pre-tax profit margin has fallen by 15.7 percentage points, going from negative 5.4% to 11%. However, the company gave back some of its expense savings as its pre-tax profit margin declined by 5 percentage points on a two-year basis.

Payoneer’s pre-tax profit margin came in at 10% this quarter. This result was in line with the same quarter last year.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Payoneer’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

Sadly for Payoneer, its EPS declined by 11% annually over the last two years while its revenue grew by 12.5%. This tells us the company became less profitable on a per-share basis as it expanded.

Diving into the nuances of Payoneer’s earnings can give us a better understanding of its performance. While we mentioned earlier that Payoneer’s pre-tax profit margin was flat this quarter, a two-year view shows its margin has declined. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q4, Payoneer reported EPS of $0.05, in line with 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 50%.

Return on equity (ROE) reveals the profit generated per dollar of shareholder equity, which represents a key source of bank funding. Banks maintaining elevated ROE levels tend to accelerate wealth creation for shareholders via earnings retention, buybacks, and distributions.

Over the last five years, Payoneer has averaged an ROE of 6.1%, 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 has no debt, so leverage is not an issue here.

We struggled to find many positives in these results. Its EPS was in line and its revenue fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 9.4% to $4.75 immediately after reporting.

Updated: February 26, 2026 at 7:56 AM 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.

Payoneer’s business quality ultimately falls short of our standards. Although its revenue growth was exceptional over the last five years, it’s expected to deteriorate over the next 12 months and its mediocre ROE lags the market and is a headwind for its stock price.

Payoneer’s P/E ratio based on the next 12 months is 17.9x. This multiple isn’t necessarily cheap, but we’ll happily own Payoneer as its fundamentals shine bright. We’re in the camp that investments like this should be held for at least three to five years to negate the short-term price volatility that can come with relatively high valuations.

Wall Street analysts have a consensus one-year price target of $8.38 on the company (compared to the current share price of $4.75).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.