Over the past six months, a resistance level has emerged in the chart of Repay Holdings Corp. (RPAY).
RPAY is engaged in providing integrated payment processing solutions to verticals that have transaction processing needs. It allows customers to pay through Mobile App, Text, Interactive Voice Response, Virtual Terminal, Hosted Payment Page and Online Customer Portal among others.
The company has been benefiting from the switch to e-commerce which has been a boon to digital payments. RPAY offers a suite of software and services for lenders and business transaction processors to accept real-time payments. There isn’t a lot of competition in the business-to-business and loan repayment industries.
RPAY had $182 million in cash as of the end of the most recent quarter, compared with $251 million in long-term debt. Though the company does have a very high current ratio of 3.6, indicating it has plenty of liquidity to handle short-term obligations.
The company had strong revenue growth over the past year, up 43.6%. Sales are expected to grow 23.4% next year. RPAY has a Price to Book ratio of 4.9, which is lower than the S&P’s 4.4.
The stock has shown negative near-term performance, but bullish mid and long-term momentum. This has led to a “Strong Buy” rating in our POWR Ratings system.
Take a look at the 1-year chart of RPAY below with added notations:
Chart of RPAY provided by TradingView
After taking a dive in March, RPAY skyrocketed to new highs. However, the stock has ended up repeatedly stalling at the $28 resistance (red) for the past six months. A solid close above that $28 mark should lead to much higher prices for RPAY.
The possible long position in the stock would be on a breakout above the $28 level with a protective stop placed under it.
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RPAY shares were trading at $27.08 per share on Thursday morning, down $0.12 (-0.44%). Year-to-date, RPAY has gained 84.85%, versus a 17.54% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp, CMT
Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock. More...
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