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 woman is excited as she reads the latest rumour on her phone.
Share Gainers

Why Catalyst Metals, Ora Banda, Spartan Resources, and TechnologyOne shares are rising today

These shares are overcoming the market weakness and pushing higher. But why?

Read more »

Lab worker puts hands in the air and dances around
Healthcare Shares

Guess which ASX healthcare stock just rocketed 46% on major news!

Investors are sending this ASX healthcare stock flying higher on Wednesday. But why?

Read more »

A man sees some good news on his phone and gives a little cheer.
Share Gainers

Why Arafura, Dropsuite, Spartan Resources, and Universal Store shares are pushing higher

These shares are having a strong session on Tuesday. But why?

Read more »

Man on a laptop thinking.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a Garfield-eque start to the trading week this Monday.

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Healthcare Shares

If you invested $5,000 in this ASX pharmaceuticals stock a year ago, you'd have $34,711 now!

Just how lucky have investors been with this stock?

Read more »

A boy stands firm on a rocky cliff holding a rocket in each hand and looking up toward the sky, anticipating flying into space.
Share Gainers

Why these 2 ASX 200 shares are surging amid today's market meltdown

Investors are bidding up these two ASX 200 shares despite the wider market meltdown. But why?

Read more »

A woman with strawberry blonde hair has a huge smile on her face and fist pumps the air having seen good news on her phone.
Share Gainers

Why 29Metals, Immutep, Insignia, and Perenti shares are pushing higher today

These shares are avoiding the market selloff. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Adore Beauty, Domino's, DroneShield, and Universal Store shares are rising today

Not all shares are falling today. Why are these rising?

Read more »