Keefe, Bruyette & Woods Reiterates Market Perform on Repay Holdings, Raises PT to $5.75

Keefe, Bruyette & Woods Reiterates Market Perform on Repay Holdings, Raises PT to $5.75

Repay Holdings (NASDAQ: RPAY) faced a mixed bag of financial results in its Q2 2025 earnings report, with revenue growth but widening net losses. The company reported a 1.0% year-over-year (YoY) increase in revenue to $75.63 million, driven primarily by its Consumer Payments segment. Despite the revenue growth, net losses expanded significantly by 2,449.7% to $108.03 million, or $1.15 per share, highlighting ongoing financial challenges [1].

Analysts at Keefe, Bruyette & Woods (KBW) have reiterated their "market perform" rating on Repay Holdings, but they have raised their price target (PT) from $4.50 to $5.75. The upgrade reflects the analysts' view that the stock is currently undervalued, despite the company's financial struggles. KBW's revised PT indicates a potential upside in the stock price, suggesting that the analysts believe the market has not fully priced in the company's recent strategic initiatives and potential turnaround [2].

The stock price of Repay Holdings demonstrated resilience in the aftermath of the earnings report, rising 2.68% on the latest trading day, with gains of 8.94% for the week and 8.28% month-to-date. However, a post-earnings investment strategy of buying RPAY when revenue beats and holding for 30 days proved highly ineffective, returning -81.42%, underperforming the benchmark by 164.01% [1].

CEO John Andrew Morris emphasized Q2's strong sequential growth, attributing it to improved go-to-market execution, sales pipeline momentum, and operational enhancements. He acknowledged temporary headwinds but highlighted robust core recurring growth from existing clients and new wins. Morris underscored strategic investments in sales, implementation, and customer support, while maintaining 42% adjusted EBITDA margins [1].

Repay Holdings provided updated guidance for 2025, forecasting sequential quarterly normalized gross profit growth in Q3 and high-single-digit to low-double-digit normalized gross profit growth in Q4. Free cash flow conversion is expected to exceed 60% in the fourth quarter. The company reiterated its capital allocation priorities, including managing CapEx as a percentage of revenue, maintaining liquidity, and addressing the 2026 convertible notes maturity [1].

In addition to the earnings report, Repay Holdings has been active in strategic partnerships and leadership changes. The company's strategic partnership with MeridianLink expanded significantly, and the appointment of a new CFO was announced as part of leadership strengthening. These developments underscore the company's focus on strategic expansion and financial governance [1].

References:
[1] https://www.ainvest.com/news/repay-holdings-2025-q2-earnings-deepening-losses-revenue-growth-2508/
[2] https://www.marketbeat.com/instant-alerts/filing-universal-beteiligungs-und-servicegesellschaft-mbh-acquires-shares-of-125928-repay-holdings-corporation-nasdaqrpay-2025-08-03/