Payment Data Systems, Inc. (NASDAQ:PYDS) Spikes After Mixed Financial Results

Payment Data Systems, Inc. (NASDAQ:PYDS)

Payment Data Systems, Inc. (NASDAQ:PYDS) shares reached more than double their closing price yesterday of $1.27 with volumes over 150 times their daily average. Yesterday PYDS shares closed at $1.27, then opened this morning at $1.34 before reaching a high of $2.65. Volumes were over 3 million shares by noon for a stock that has an average trading volume of less than 50,000.

Payment Data Systems, Inc. (NASDAQ:PYDS), headquartered in San Antonio, TX, is a payment solutions provider. The firm caters to the needs of merchants, billers, banks, and card issuers. Payment Data systems supplies credit/debit, pre-paid, and ACH payment processing solutions and has proprietary technology in the pre-paid card sector.

The Company was founded in 2009 and led by industry veteran and visionary Vaden Landers. Payment Data Systems has experienced rapid growth. In 2016, Singular processed over 2.5 million transactions worth over $440 million in transaction dollars.

Yesterday Payment Data Systems, Inc. (NASDAQ:PYDS) released their Q4 and full year results for 2016. Q4 revenues came in at $2.9 million and resulted in a net loss of $243,382 or -$0.03/share. In 2015, Payment Data Systems earned $14.4 million but that number declined to $12.1 million for 2016. In 2015, there was a profit of $1.1 million which translated into a diluted share profit of $0.08. However in 2016, there was a loss of -$1.2 million or -$0.08/share. Unfortunately, gross margins and transaction volumes also trended the wrong way. In 2015 PYDS recorded gross margins of $5 million (34.5%) but that number dropped to $3.8 (31.3%) million for 2016. Importantly, cashflows were better in 2016 and Payment Data Systems ended with $4.1 million in cash. However, in terms of aggregate dollars processed, Payment Data Systems, Inc. (NASDAQ:PYDS) came in third in the industry so not all is bad news.

Payment Data Systems, Inc. (NASDAQ:PYDS) took steps to further its business prospects in 2016. Most notable was the creation of an Apple iOS development kit. This kit will help developers integrate PYDS services into their own APPS or digital services offerings thereby increasing the user base of PYDS. The company has also made plans to acquire Singular Payments. Singular is primarily focused on custom software integrations of their flat rate payment process offering and their proprietary electronic bill presenting and payment platform, which allows merchants to streamline invoicing and collection processes.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Author: Marcus Anderson

Marc has a degree in economics and a MSc. in Finance. Marc worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

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