Paysafe (PSFE) Stock Forecast & Price Target

Paysafe is benefiting from a differentiated two-sided payments ecosystem that combines Merchant Solutions, Digital Wallets, and eCash, creating a moat in specialized, high-risk verticals where compliance, risk management, and pricing power matter. Its fundamentals improved as 1Q26 revenue rose 10% y/y to $442.7M, adjusted EBITDA reached $99.2M, and net leverage declined to 5.2x from 5.5x in 4Q25, while Merchant Solutions and Digital Wallet both beat expectations. The outlook is further supported by strong iGaming volumes, rising data licensing contributions, 3-month active users up 9% y/y in Digital Wallets, and management’s stated path toward lower leverage over the next 12–24 months.

Paysafe is facing a deteriorating fundamental profile because revenue strength has not translated into healthier profitability, with adjusted EBITDA margins contracting 150 bps year over year as Digital Wallets absorbed heavier investment, distributor commissions, and an unfavorable product mix. The balance sheet also looks stretched, as net leverage rose to 5.3x in 2Q26 from 5.2x in 1Q26, free cash flow conversion fell to 44% of adjusted EBITDA, and a recent debt refinancing is adding about $25M of annual interest expense while cutting FY26 adjusted EPS guidance to $1.90-$2.03. Further pressure comes from slower Digital Wallets growth of just 3% reported and 1% organic, a 5% decline in ARPU to $26, and elevated restructuring and litigation-related cash costs, while execution still depends on a 2H ramp in a highly regulated, high-risk mix.