On Monday, Canaccord Genuity launched coverage on Tyro Payments Limited (TYR:AU) (OTC: TYPMF) stock, issuing a Buy rating with a price target set at AUD1.65. The firm highlighted Tyro Payments as the fifth-largest merchant acquiring bank in Australia, serving over 71,000 merchants with more than 115,000 terminals.
Founded in 2003 and going public on the ASX in December 2019 at $2.75 per share, Tyro Payments had an enterprise value (EV) of $1.2 billion at that time. This valuation represented an EV/revenue multiple of 4.9 times. Despite the company's revenues increasing by over 105%, the current EV/revenue multiple stands at 0.7 times.
Canaccord Genuity attributes Tyro Payments' success to its role as an innovator within the industry, with a focus on developing purpose-built customer solutions and being the first to market with these products. The company has reported a five-year gross profit compound annual growth rate (CAGR) of 20%.
The coverage note also mentioned Tyro Payments' recent shift into profitability, with a forecasted free cash flow (FCF) of $23 million for the fiscal year 2025. Additionally, the company provided guidance for the fiscal year 2026, expecting an EBITDA/gross profit margin of over 29% on a gross profit growth of 11%.
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