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  5. PAY: It must be known by now how Door Dash is replacing Payfare's service. [Payfare Inc. Class A Common Shares]
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Q: It must be known by now how Door Dash is replacing Payfare's service. Are they internalizing the immediate pay function or are they selecting an alternate provider? If it was easy to internalize the function aren't other customers likely to follow suit? Pls. give me your best guess on Payfare's future - does it have a saleable service or not?
Thanks, Hugh
Asked by Hugh on October 16, 2024
5i Research Answer:

DASH has not announced anything, and we have not see any disclosure from PAY competitors. For now, we have to assume it is internal until more info is received. We would not say it is 'easy' at all, but for a company such as DASH that spent more than $1 billion on R&D last year it is certainly feasible. The problem now with PAY is that its remaining customers are still somewhat concentrated, and its offering clearly needs some work (otherwise DASH would have stayed). We think downside from here is probably limited, with $82M cash and still $100M+ (estimates) in other revenue. But with its small size, losses heading into tax loss season, and general negative momentum and investor disappointment, it is hard to paint a really strong outlook for the stock in the next six months. We took the hit in our Growth Portolio to move on to better pastures. There is still possible upside longer term, and of course the company now has a strategic review in place.