Nayax CEO Defends Growth Strategy and Long-Term Valuation After Market Correction
Fintech firm Nayax defends its strategic investments and long-term growth trajectory after a stock correction, following the acquisition of U.S.-based IPS.
Noyb, a prominent fintech company, recently surprised investors by lowering its annual free cash flow guidance due to heavy investments aimed at supporting future growth. Following the announcement, the company lost approximately 35% of its market value and now trades on Nasdaq and the Tel Aviv Stock Exchange at a market capitalization of $1.67 billion. Amid these market adjustments, Nayax announced the largest acquisition in its history—purchasing U.S.-based IPS, a smart parking technology provider that establishes its entry into the American parking sector. The acquisition is financed through debt, which will temporarily increase financial leverage.
Insider Buying and Long-Term Vision
Co-founder, CEO, and controlling shareholder Yair Nahmad identified the market pullback as an opportunity, recently acquiring $4.6 million worth of company shares at an average price of around $44. In an interview, Nahmad emphasized that he sees no rational justification for the current valuation. Addressing executive compensation, Nayax recently introduced an equity incentive plan where the founders—Nahmad and Chief Technology Officer David Ben-Abbi—will receive rewards valued at approximately $10 million if the stock reaches $240, representing a fivefold increase.
"Back in 2021, we told the market that by 2028 we would reach $1 billion in revenue, a 50% gross profit margin, and a 30% adjusted EBITDA. If we factor in growth exceeding 25%, operational efficiencies, and an EBITDA multiple of 15 to 25, we will reach $240," Nahmad stated.
Global Expansion and Strategic Acquisitions
Founded in 2005, Nayax went public in Tel Aviv in 2021 and on Nasdaq in 2022. The founders still maintain a collective 58.4% stake in the firm. Despite a turbulent summer that included the stock correction and the $350 million IPS acquisition, Nayax management remains confident. The company trimmed its 2024 free cash flow projection to 5%–10% of EBITDA rather than the previously anticipated 40% (roughly $6.6 million down from $35 million) due to long-term growth expenditures. Nahmad reassured stakeholders of the company's robust operational health, noting consistent 25%–28% growth rates and steady customer retention rates of approximately 2.7%.
