Will Worldpay Pay Off For Investors?

The movement toward cross-border, global currency remittances is a vital market, and according to The Wall Street Journal, Worldpay has the tools in place to get the job done.

The company, which made its public debut on London markets this past fall, has also seen high valuations remain stubbornly in place, despite global market volatility. The multiples are such, said WSJ, that investors buying the stock are asking “payment for something that could take years to deliver.” The technology is such that the company is able to open up card payments for online retailers with a yearning to make eCommerce smoother. As WSJ noted, less than one in five of the company’s U.K. small business users, and a relatively paltry one in 10 users in the United States, actually use the site to conduct payments, citing research from Canaccord Genuity.

Even so, the company is projected to boost its revenue by as much as 10 percent through the next several years, and margins should grow enough so that earnings outpace that rate, moving out to 2018, according to at least one broker from Morgan Stanley.

But all of that sanguine outlook may be baked into a share price that trades at 38 times forward multiples, higher than Vantiv at 31 times forward estimates and Heartland at 34. And the Worldpay multiple is twice that of the projected growth rate. Much would have to happen to boost that multiple, and the company is facing competition from the likes of Apple and Google, no slouches in the technological innovation department. The two are ramping up efforts, even while Worldpay is in the midst of building some of its technology out and gathering new customers.