Keefe Bruyette upgrades Nayax stock rating on growth potential

Keefe, Bruyette & Woods upgraded Nayax's stock rating to "Outperform" from "Market Perform" and set a price target of $75.00. The upgrade reflects the firm's belief that the recent decline in the stock price presents a good entry point for the payment solutions provider. Nayax's stock has fallen 18% over the past week, reaching $50.60, with RSI indicating an oversold condition.

The firm's upgrade is driven by proactive investments aimed at expanding the total addressable market and boosting wallet share potential, along with a shift in revenue mix towards higher-margin recurring revenue. Nayax leads in the unattended vertical, with substantial room for market penetration, and continues to execute in line with the company's 2028 targets.

The $75 price target equates to a 48% upside from the current level, matching the range suggested by broader analyst consensus, which varies between $70 and $83. Additionally, Nayax's recent quarter saw a 28% increase in revenue to approximately $123 million, primarily due to organic growth of 21% across different geographies and sectors.

However, the company reported a net loss of $10.1 million, driven by elevated stock-based compensation and financing costs. Despite the loss, adjusted EBITDA rose by 12% to $40 million. Nayax's recurring revenue, which grew by 24%, constitutes 72% of total sales, emphasizing its subscription-like business model. The company maintains its revenue and EBITDA guidance for 2026 but has adjusted expectations for free cash flow conversion.

Nayax is also investing in electric vehicle charging, financial services, and banking infrastructure to explore new growth prospects.