FlexShopper (FPAY) is a financial technology company that enables consumers utilizing its e-commerce marketplace to shop for brand name electronics, home furnishings and other durable goods on a lease-to-own (LTO) basis, explains Faris Sleem, a low-priced stock specialist and editor of The Bowser Report.

It effects these transactions by first approving consumers through its proprietary, risk analytics-powered underwriting model; then collecting money from consumers under an LTO purchase agreement and funding the LTO transactions by paying merchants for their goods. FPAY offers its products through the FlexShopper website and holds several registered patents and patent applications on aspects of its LTO system.

LTO transactions outside of brick and mortar stores created the virtual LTO (vLTO) market and plenty of opportunity to go along with it. Customers that use FlexShopper for vLTO offerings make weekly payments debited via automatic ACH and can save money with attractive early payoff options.

These products range from electronics to furniture and that just barely scratches the surface of the various offerings in the $25 billion vLTO market. FPAY is currently the only omni-channel LTP provider.

This means that the company facilitates both sides of LTO purchases. This allows consumers to have immediate purchasing power or to save the sale if they don’t qualify for traditional credit. It also encourages repeat customers for FPAY and lower overall costs. 

Strong consumer demand and organic growth have driven revenue higher over the past few years. By expanding its offerings and range of customers, FPAY has made FlexShopper a reputable brand.

This branding and higher repeat customers makes us confident that the company will maintain revenue growth. The company recently announced that net revenues and fees for 3QFY21 were $30.9 million, up 25% from $24.6 million in the same period last year.

Net income and EBITDA also saw substantial increases and repeat customer trends continued to be favorable. The expansion in gross margins and improved bottom-line results are significant and should boost the company’s book value in the long haul.

FPAY is a growth stock with a solid business model and confident insiders. It is a Top Pick for 2022 with the caveat that this is a high risk investment idea.

Insiders have purchased 983,902 shares over the past year and have a history of heavy accumulation. This is clearly a vote of confidence in the company and its potential to keep dominating the LTO market. Although it is overvalued, the growth stock offers a unique long-term investment opportunity at its current share price.

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