Research note


Westpay: The market just don’t get it

Today Westpay presented yet another significant milestone which likely will speed-up the growth trajectory for the company; a new cooperation agreement with the leading card acquirer Elavon. Westpay continues to deliver groundbreaking news like: Elavon cooperation, Gold partner to Oracle, Online offering, letter of intent in Australia with Cirralto, cooperation with Svenska Handelsbanken, certification in Sri Lanka, South Africa, Denmark, Poland and more. And yet the market still does not get it. We are undoubtedly positive about the company’s growth prospects. Our current Base-case valuation amounts to SEK 18 per share.

Today the company communicated that they have signed an agreement with Elavon, which is a leading global card acquirer. Elavon, owned by US Bank, is a global player with over 1.3 million customers. Westpay’s offering will be considerably strengthened through the Elavon cooperation, which should lead to an even faster roll-out in the European countries. One important note is that Westpay will receive recurring revenue based on all transactions, which will further strengthen the gross margin going forward. Even though it’s hard today to say which volumes the agreement with Elavon might bring during the coming years, we find it clearly positive.

Just as we earlier mentioned, Westpay continues to deliver important milestones and collaborations. During the last eight months, some of the key happenings include:

  • Elavon cooperation
  • Gold partner to Oracle
  • A new online offering
  • Letter of intent in Australia with Cirralto
  • Cooperation with Svenska Handelsbanken  
  • Certifications: Sri Lanka, South Africa
  • Entered Denmark, Poland, and more European countries
  • And even more…

We often call Westpay a FinTech company in disguise; this is very true as it is clear that the market still does not get it. We are undoubtedly positive about the company’s growth prospects, it will take some time, but the market will eventually catch up. We see increasing volumes during H2’18 and onwards from international markets. Our current Base-case valuation amounts to 18 SEK per share.

Download our latest Research Report from 2018-10-04

Download full report icon-download