Critical Review: Cantaloupe (NASDAQ:CTLP) and Paysafe (NYSE:PSFE)

Cantaloupe (NASDAQ:CTLP) and Paysafe (NYSE:PSFE) are both small-cap business services companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, earnings, analyst recommendations and profitability.

Profitability

This table compares Cantaloupe and Paysafe’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cantaloupe	17.32%	8.76%	5.73%
Paysafe	-10.73%	11.55%	1.83%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Cantaloupe and Paysafe, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cantaloupe	1	6	1	0	2.00
Paysafe	2	4	1	0	1.86

Cantaloupe presently has a consensus price target of $12.60, suggesting a potential upside of 20.11%. Paysafe has a consensus price target of $9.81, suggesting a potential upside of 41.87%. Given Paysafe’s higher probable upside, analysts plainly believe Paysafe is more favorable than Cantaloupe.

Insider and Institutional Ownership

75.8% of Cantaloupe shares are held by institutional investors. Comparatively, 54.4% of Paysafe shares are held by institutional investors. 7.1% of Cantaloupe shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Cantaloupe has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500. Comparatively, Paysafe has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500.

Valuation & Earnings

This table compares Cantaloupe and Paysafe”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cantaloupe	$302.55 million	2.56	$64.53 million	$0.18	58.28
Paysafe	$1.70 billion	0.21	-$182.51 million	($3.15)	-2.20

Cantaloupe has higher earnings, but lower revenue than Paysafe. Paysafe is trading at a lower price-to-earnings ratio than Cantaloupe, indicating that it is currently the more affordable of the two stocks.

Summary

Cantaloupe beats Paysafe on 9 of the 13 factors compared between the two stocks.

About Cantaloupe

Cantaloupe, Inc., a digital payments and software services company, provides technology solutions for self-service commerce market. The company offers integrated solutions for payments processing, logistics, and back-office management. It also provides G11 cashless and pulse kits that are 4G LTE digital payment devices for payment and consumer engagement applications; G11 chip kit, a digital reader that accepts contact EMV and contactless EMV payment methods; Engage series comprising Engage and Engage Combo, which are digital touchscreen devices that offers networking, security, and interactivity payment methods; and card touchscreen card readers, including P66, P100, P100Pro, and P30. In addition, the company offers self-checkout kiosks,?smart store?concepts, and the Cantaloupe Go management platform comprising Go Mini, Go MiniX, Go Plus100, Go Plus200, Go Plus300, Go Max, Cooler Cafe, and Smart Market; Go Portal, a robust cloud-based platform; and Cheq products, which supports attended and unattended self-service kiosks for the stadium, entertainment, and festival sectors. Further, it provides integrated software services for payment or asset tracking devices in the field to connect into platform for advanced data management, analytics, route scheduling, and loyalty and reward programs; and a range of self-service hardware solutions for vending, micro-markets, amusement, arcade, commercial laundry, air/vacuum, car wash, and other applications. Additionally, the company offers professional, network infrastructure, card processing, and customer/consumer services. Cantaloupe, Inc. was formerly known as USA Technologies, Inc. The company was incorporated in 1992 and is headquartered in Malvern, Pennsylvania.

About Paysafe

Paysafe Limited provides end-to-end payment solutions in the United States, Germany, the United Kingdom, and internationally. Its payments platform offers a range of payment solutions comprising credit and debit card processing, digital wallet, eCash, and real-time banking solutions for entertainment verticals, such as iGaming, including online betting related to sports, e-sports, fantasy sports, poker, and other casino games, as well as travel, streaming/video gaming, retail/hospitality, and digital assets. The company operates through two segments, Merchant Solutions and Digital Wallets. The Merchant Solutions segment offers PCI-compliant payment acceptance and transaction processing solutions for merchants and integrated service providers, including merchant acquiring, transaction processing, gateway solutions, fraud and risk management tools, data and analytics, point of sale systems, and merchant financing solutions, as well as comprehensive support services under the Paysafe and Petroleum Card Services brands. The Digital Wallets segment offers digital wallet solutions under the Skrill, NETELLER, paysafecard, and Paysafecash brands; and pay-by-bank solutions under the Rapid Transfer brand. It also provides eCash solutions under the paysafecard and Paysafecash brands; paysafecard prepaid Mastercard that can be linked to a digital paysafecard account and used to make purchases; Safetypay, a platform that enables eCommerce transactions; and PagoEfectivo, an alternative payment platform. The company is based in London, the United Kingdom.