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1. Company Snapshot

1.a. Company Description

Lesaka Technologies, Inc., a financial technology company, provides fintech products and services to unbanked and underbanked individuals and small businesses primarily in South Africa and internationally.The company develops payment technologies to offers financial and value -added services to its customers.It operates through three segments: Processing, Financial services, and Technology.


The Processing segment provides transaction processing services that involve the collection, transmittal, and retrieval of all transaction data to its customers.The Financial services segment includes activities related to the provision of financial services to customers, including bank accounts, loans, and life insurance products.This segment also offers short-term loans to customers.


The Technology segment sells hardware, such as point of sale devices, SIM cards, and other consumables; and licenses right to use certain technology developed by the company, as well as offers related technology services.The company was formerly known as Net 1 UEPS Technologies, Inc.and changed its name to Lesaka Technologies, Inc.


in May 2022.Lesaka Technologies, Inc.was incorporated in 1997 and is headquartered in Johannesburg, South Africa.

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1.b. Last Insights on LSAK

Lesaka Technologies' recent performance has been negatively impacted by allegations of fraud, with law firms Schall Law Firm and Bragar Eagel & Squire, P.C. investigating the company on behalf of investors. Despite beating Q4 earnings estimates with $0.05 per share, the company's growth prospects are overshadowed by high CapEx, emerging market volatility, and delayed profitability consolidation. The acquisition of Bank Zero Mutual Bank, aimed at reducing borrowing costs, may prove transformative but also poses integration risks. Additionally, the company's expansion in African consumer markets and insider buying may support a long-term bullish outlook.

1.c. Company Highlights

2. Lesaka Technologies' Q1 FY '26 Earnings: A Strong Start to the Year

Lesaka Technologies reported a robust first quarter, with net revenue reaching ZAR 1.53 billion, a 45% year-over-year increase, and group adjusted EBITDA of ZAR 271 million, up 61% year-over-year. Adjusted earnings per share nearly doubled to ZAR 1.07, with adjusted earnings growing 150% to ZAR 87 million. The company's actual EPS was ZAR 0.06, beating estimates of ZAR 0.03. The net debt to adjusted EBITDA ratio improved to 2.5x, indicating a reduction in leverage.

Publication Date: Dec -02

📋 Highlights
  • Consecutive Guidance Met: Lesaka met guidance for the 13th consecutive quarter, reflecting consistent performance.
  • Revenue Growth Surge: Net revenue jumped 45% YoY to ZAR 1.53 billion, driven by strong consumer and merchant divisions.
  • EBITDA Expansion: Group adjusted EBITDA rose 61% to ZAR 271 million, with Enterprise division EBITDA surging 241% to ZAR 22 million.
  • Debt Reduction: Net debt-to-adjusted EBITDA ratio improved to 2.5x, on track for a medium-term target of 2x or less.
  • Consumer Division Growth: Consumer segment revenue grew 43% YoY, with EBITDA up 90% to ZAR 150 million, aided by Adumo acquisition.

Segment Performance

The Enterprise division reported a 19% year-over-year increase in net revenue to ZAR 222 million, with segment adjusted EBITDA up 241% to ZAR 22 million. The Consumer division delivered a 43% year-over-year increase in net revenue, with segment-adjusted EBITDA up 90% to ZAR 150 million. The Merchant division's net revenue was up 43%, driven by the Adumo acquisition. Operational KPIs showed significant growth, including a 24% increase in active consumers and a 13% year-over-year increase in ARPU to ZAR 89.

Operational Highlights

The company originated ZAR 201 million in merchant lending and ZAR 820 million in consumer lending, with a 21% and 77% year-over-year increase, respectively. Gross written premiums from insurance products rose 38% year-over-year to ZAR 120 million. Lesaka Utilities, a recharger business acquired last year, saw its TPV increase by 21% year-on-year to ZAR 396 million in quarter 1. The company is progressing with its strategic initiatives, including the acquisition of Bank Zero, which is expected to close by the end of FY 2026.

Guidance and Outlook

Lesaka has reaffirmed its FY '26 annual guidance on net revenue, group adjusted EBITDA, net income profitability, and adjusted EPS. For the second quarter, guidance ranges are ZAR 1.575 billion to ZAR 1.725 billion for net revenue and ZAR 280 million to ZAR 320 million for group-adjusted EBITDA. Analysts estimate next year's revenue growth at 27.1%. To achieve the midpoint of the full-year guidance, ZAR 780 million needs to be realized in the last two quarters, implying ZAR 390 million per quarter, a considerable leap from Q2.

Valuation

Lesaka's current P/S Ratio is 0.46, and its EV/EBITDA is -5.98, indicating that the market has not yet priced in the company's growth prospects. The Net Debt / EBITDA ratio has improved to 1.11, suggesting a manageable debt burden. With the acquisition of Bank Zero, Lesaka is poised for further growth, and its current valuation metrics suggest potential upside.

3. NewsRoom

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Lesaka Technologies, Inc. (LSAK) Q1 2026 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

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Lesaka's Q1 FY2026 Results: Lesaka achieves Q1 FY2026 guidance and reaffirms FY2026 outlook

Nov -05

Source: globenewswire.com

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LESAKA INVESTIGATION ALERT: Bragar Eagel & Squire, P.C Continues Investigation into Lesaka Technologies, Inc. on Behalf of Lesaka Stockholders and Encourages Investors to Contact the Firm

Nov -01

Source: globenewswire.com

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INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Lesaka Technologies, Inc. - LSAK

Oct -23

Source: prnewswire.com

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INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Lesaka Technologies, Inc. - LSAK

Oct -18

Source: prnewswire.com

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INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Lesaka Technologies, Inc. - LSAK

Oct -13

Source: prnewswire.com

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INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Lesaka Technologies, Inc. - LSAK

Oct -08

Source: prnewswire.com

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Lesaka Webcast and Conference Call to Review First Quarter 2026 Results

Oct -07

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.17%)

6. Segments

Merchant

Expected Growth: 12.43%

Lesaka Technologies' Merchant segment growth of 12.43% is driven by increasing adoption of digital payment solutions, expansion into new markets, and strategic partnerships. Additionally, the segment benefits from the growing demand for contactless payments, online transactions, and mobile wallets, further fueled by the COVID-19 pandemic.

Consumer

Expected Growth: 10.27%

Lesaka Technologies' 10.27% growth is driven by increasing adoption of digital lending solutions, expansion into new markets, and strategic partnerships. The company's focus on providing accessible financial services to underserved consumers has led to a significant increase in customer acquisition and retention. Additionally, the rise of fintech and mobile payments has contributed to the growth of Lesaka's consumer segment.

Unallocated

Expected Growth: 10.47%

Lesaka Technologies' 10.47% growth is driven by increasing demand for digital payment solutions, strategic partnerships, and expansion into new markets. The company's innovative products, such as EFTpay and ConnectPay, have gained traction, contributing to revenue growth. Additionally, effective cost management and operational efficiencies have enhanced profitability.

7. Detailed Products

EFT Payment System

A secure and efficient electronic funds transfer system that enables businesses to process payments electronically.

Virtual Card Solutions

A digital payment solution that enables businesses to generate virtual cards for online transactions.

Tokenization Services

A secure payment tokenization service that replaces sensitive payment information with a unique token.

Payment Gateway

A secure online payment gateway that enables businesses to accept online payments.

Digital Wallet Solutions

A digital wallet solution that enables businesses to store and manage customer payment information securely.

Card Issuance and Management

A card issuance and management solution that enables businesses to issue and manage physical and virtual cards.

8. Lesaka Technologies, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Lesaka Technologies, Inc. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the evolving nature of the fintech industry.

Bargaining Power Of Customers

Lesaka Technologies, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products and services are tailored to meet specific customer needs, making it difficult for customers to switch to alternative providers.

Bargaining Power Of Suppliers

Lesaka Technologies, Inc. relies on a few key suppliers for its operations, which gives them some bargaining power. However, the company's strong relationships with its suppliers and its ability to negotiate favorable terms mitigate this risk.

Threat Of New Entrants

The fintech industry is rapidly evolving, and new entrants are constantly emerging. Lesaka Technologies, Inc. faces a high threat of new entrants, which could potentially disrupt its market share and revenue streams.

Intensity Of Rivalry

The fintech industry is highly competitive, with many established players and new entrants vying for market share. Lesaka Technologies, Inc. operates in a highly competitive landscape, which increases the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 39.64%
Debt Cost 8.71%
Equity Weight 60.36%
Equity Cost 8.71%
WACC 8.71%
Leverage 65.68%

11. Quality Control: Lesaka Technologies, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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F-Secure

A-Score: 4.8/10

Value: 5.5

Growth: 4.2

Quality: 8.1

Yield: 3.1

Momentum: 1.5

Volatility: 6.3

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secunet

A-Score: 4.6/10

Value: 1.5

Growth: 6.6

Quality: 6.5

Yield: 1.9

Momentum: 10.0

Volatility: 1.3

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Alarum Technologies

A-Score: 4.0/10

Value: 3.8

Growth: 5.2

Quality: 8.0

Yield: 0.0

Momentum: 7.0

Volatility: 0.0

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Lesaka Technologies

A-Score: 3.4/10

Value: 8.8

Growth: 3.7

Quality: 3.4

Yield: 0.0

Momentum: 2.0

Volatility: 2.3

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Cognyte Software

A-Score: 3.4/10

Value: 3.6

Growth: 4.7

Quality: 4.1

Yield: 0.0

Momentum: 6.5

Volatility: 1.3

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HUB Cyber Security

A-Score: 3.3/10

Value: 9.8

Growth: 0.9

Quality: 5.0

Yield: 0.0

Momentum: 4.0

Volatility: 0.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

4.06$

Current Price

4.06$

Potential

-0.00%

Expected Cash-Flows