Why the PayGroup (ASX:PYG) share price is up 8% on Thursday

The PayGroup Ltd (ASX: PYG) share price is on fire today…

| More on:
share price up

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The PayGroup Ltd (ASX: PYG) share price is on fire today. At the time of writing, PayGroup shares are up a very healthy 8.16% to 53 cents a share. That comes after this payments company closed at 49 cents a share yesterday, and opened at 52 cents this morning.

The S&P/ASX 200 Index (ASX: XJO) is also having a pretty decent day today, up 0.7% so far today to 7,360 points. But PayGroup is certainly delivering some very impressive outperformance today. So why is this company hitting its stride so enthusiastically?

Well, it's almost certainly due to the market update the company released to investors this morning.

This was a quarterly business update, as well as revised guidance for the 2022 financial year (FY2022). Let's dive in.

Quarterly results, guidance update

So PayGroup reported that the quarter ending 30 June 2021 saw PayGroup record $4.6 million in new contracts, a 53% increase over the prior corresponding period. 28% of these new contracts came from PayGroup's Global Partner Program, which is a "significant increase" on previous quarters". Additionally, the company saw a 12% increase in annualised payslips from 6 million at the start of the quarter to 6.7 million by the end.

PayGroup also reported that as of 30 June, the company's cash balance stood at $12.5 million, with no debts. According to PayGroup, this makes the company "well positioned to capitalise on growth initiatives".

But let's talk about PayGroup's FY2022 guidance. So PyaGroup expects to receive between $35 million and $37 million in annualised recurring revenue (ARR) for FY2022. This is an increase of 29-36% from the company's ARR of $27.2 million that it recorded at the conclusion of FY21.

Here's some of what Mark Samlal, founder and managing director of PayGroup, had to say in today's announcement:

FY22 will be a significant year for PayGroup. The guidance we announce today highlights the exciting
growth profile of the business and our ability to consistently execute on our proven strategy. With the
platform now in place and our technology roadmap underway, we are focused on extracting the significant
embedded value across the Group in the interest of long-term shareholder value creation.

About the PayGroup share price

Although PayGroup shares are up more than 8% today, PayGroup is still down around 14.5% year to date in 2021 so far, and down more than 29% over the past 12 months. It also remains down 30.3% since its IPO back in 2018.

At the current share price, PayGroup has a market capitalisation of $56.35 million.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

A man looking at his laptop and thinking.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors finished the trading week on a sour note today.

Read more »

Happy teen friends jumping in front of a wall.
Share Gainers

4 ASX 200 stocks smashing the benchmark this week

Investors are sending these four ASX 200 stocks soaring this week. But why?

Read more »

Woman with an amazed expression has her hands and arms out with a laptop in front of her.
Share Gainers

Why IGO, Johns Lyng, Lynas, and Web Travel shares are pushing higher today

These shares are ending the week on a high. But why?

Read more »

Happy teen friends jumping in front of a wall.
Share Gainers

Guess which 4 ASX 200 shares are rocking new 52-week highs today!

Investors just sent these four ASX 200 shares to one-year-plus highs.

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Share Gainers

Why Evolution Mining, Orthocell, Platinum, and Turaco shares are charging higher

These shares are having a better day that most on Thursday.

Read more »

A man looking at his laptop and thinking.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a disappointing hump day session for the ASX today.

Read more »

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX managed to bank a small rise this Tuesday.

Read more »

Sport trainer talking to little girl who is climbing wooden ladder in gym.
Share Gainers

Why Vault Minerals, Droneshield, Westgold Resources shares are climbing higher today

These shares are gaining on Tuesday, but why?

Read more »