PaySafe (NYSE:PSFE) continues to receive the cold shoulder from investors. Since completing its reverse merger in March, PSFE stock is down 23%.

This is largely being attributed to SPAC fatigue. As many investors know, PaySafe was one of a record number of companies that went public via a special purpose acquisition company (SPAC) last year.  

However, some SPACs are better than others, and PaySafe falls in the latter category, on paper at least. I say this because PaySafe brings both revenue and profits to the table. Many SPACs fail to deliver either. In fact, PaySafe is a company that previously was trading publicly.  

Will the second time around be better for investors? So far, it’s not going well. PaySafe offered its first financial results on May 11. The numbers were good, but PSFE stock still dropped 23%.  

At the time, the reason was that the company’s revenue guidance for the year came in below expectations. But it really didn’t. That is, the low end of $480 million was below the consensus estimate, but companies always give these numbers as ranges. As it happened, the midpoint of PaySafe’s range was right on Bloomberg’s number of $488 million. 

If there is something to this SPAC fatigue, the current drop in PSFE stock is a nice opportunity for buy-and-hold investors.  

The iGaming Space and PSFE Stock

When you first hear the words “payment processors” companies like PayPal (NASDAQ:PYPL) or Square (NYSE:SQ) may come to mind and with good reason. Those two companies are well established in the fintech space. However, for the time being, both companies are staying out of the iGaming space. 

That’s leaving the field wide open for PaySafe and they have made large inroads. The company has existing agreements with DraftKings (NASDAQ:DKNG), Caesar’s Entertainment (NASDAQ:CZR) as well as Roblox (NYSE:RBLX) and Amazon’s (NASDAQ:AMZN) Twitch. 

However PayPal and Square were also out of the cryptocurrency markets. Now they are being termed crypto “whales.”  

Could the same be true of iGaming as it continues to become normalized in the United States? It’s likely. The actual risk in iGaming transaction is pretty small. That’s because the payments have to be deposited in advance.  

So what’s the reward? If PaySafe is correct, they will exceed $103 billion in transactions this year. In addition to collecting a sizable transaction fee, the company also gets user fees from iGaming sites.

The company is live in 15 states. That number will only grow as iGaming gains acceptance. Which is why the company forecasts that iGaming in the United States will grow at a compound annual growth rate (CAGR) of 52% through 2025.

Consumers Are Looking For Options 

If I were to sound a cautionary note on PaySafe, I’d point out that it’s been around for over 20 years. That’s about as long as PayPal (23 years) and longer than Square (12 years). Yet, PaySafe is far less entrenched with brick-and-mortar retail than these companies, but that could be changing.

PaySafe recently released the results of research it commissioned through Sapio Research. David Moadel gives you some of the highlights of this research, but suffice it to say that consumers are embracing alternative payment methods. One reason is the perceived security of these transactions.

While consumers may be looking for alternatives, outside of iGaming they may not have the option to use PaySafe. The company’s products are not as widely accepted as PayPal or Square.

Of course, even with what is seen as a premium valuation, PaySafe’s market cap is far below these two companies.  

PSFE Stock Is Entering a Buy Zone  

Right now, PSFE stock looks like a tough trade. The 20-day moving average dipped below the 50-day moving average in March and hasn’t recovered.

At the same time, the stock did find support around $10.37 a share in May. However, the stock  continues to trade lower and is will open today around $11.20.  

If you have patience and see PaySafe as a long opportunity on the future of iGaming, now looks like a good time to enter a position on PSFE stock. The prudent advice would be to go slow, but I do believe that PaySafe is a buy at its current price.  

On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. 

Chris Markoch is a freelance financial copywriter who has been covering the market for seven years. He has been writing for Investor Place since 2019.