Raymond James has raised its recommendation on Paymentus Holdings (NYSE: PAY) to Strong Buy from Outperform and reduced its price objective to $35.00 from $41.00, while placing the stock on its Analyst Current Favorites list.
The firm highlighted the pronounced pullback in the shares: Paymentus has fallen 30% over the last three months even as the Russell 2000 rose 13% in the same span. Over a six-month window the stock is down 34%. Shares were trading near $24.45 at the time of the note, close to a 52-week low of $22.65.
On fundamentals, Raymond James expects robust fourth-quarter results. The firm models potential mid-single digit percentage upside to contribution profit dollars and to adjusted EBITDA. For the company’s initial fiscal 2026 outlook, Raymond James anticipates guidance that will likely align with current Street expectations across the key metrics it follows.
Looking beyond the initial outlook, the firm judges that fiscal 2026 guidance could prove conservative. Raymond James sees the potential for mid-single digit contribution profit dollar upside and high-single digit adjusted EBITDA upside as the year progresses. Its analysis also indicates a low-to-mid 20% internal rate of return under a takeout price in the $30-35 range.
Valuation context provided by Raymond James shows Paymentus trading at 13 times the firm’s bull-case 2027 adjusted EBITDA estimate. Balance-sheet strength is another pillar of the analyst note: the company is described as having no debt and a current ratio of 4.36, signaling substantial short-term liquidity. InvestingPro analysis is cited as suggesting the stock is undervalued at current market levels, with a Fair Value above the trading price.
In separate research activity, Freedom Capital Markets has started coverage of Paymentus with a Buy rating and set a price target of $40.00. That firm highlighted Paymentus as a leading provider of cloud-based bill payment technology, reflecting confidence in the company’s business model and growth potential.
The recent analyst moves encapsulate a bullish view from multiple research shops driven by perceived valuation opportunity, expected upside to profit and margin measures, and a strong liquidity position. At the same time, the stock’s steep recent decline and proximity to its 52-week low underscore investor caution amid the wider market backdrop.