Alliance Global Partners analyst Brian Kinstlinger maintained a Buy rating on Priority Technology Holdings (PRTH – Research Report) today and set a price target of $9.00.
Brian Kinstlinger has given his Buy rating due to a combination of factors. Priority Technology Holdings (PRTH) displayed solid growth in its third quarter revenue, with a year-over-year increase of 13.6% to $189 million. This growth was largely driven by new enrollments, leading to accelerated revenue growth from the high-margin enterprise payments segment. Concurrently, PRTH’s adjusted EBITDA increased by 21% compared to the previous year, reaching $42 million. This increase was $2 million above the initial estimate.
Kinstlinger’s recommendation also takes into account the company’s improving margin profile. As PRTH’s operation mix shifts from a transaction-based to a recurring (banking as a service) model, it continues to show significant improvement. The analyst also pointed out that the slower growth from low-margin consumer payments is being offset by stronger growth in high-margin enterprise payments. As a result, the adjusted EBITDA forecast for 2024 has been increased to $201 million from the previous $187 million. These factors collectively contribute to the decision to maintain a Buy rating and a $9 price target.
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Priority Technology Holdings (PRTH) Company Description:
Priority Technology Holdings, Inc. operates as a blank check company, which was formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization, or other similar business combination. It operates through the following segments: Consumer Payments and Commercial Payments and Managed Services. The Consumer Payments segment- represents consumer-related services and offerings including merchant acquiring and transaction processing services including the proprietary MX enterprise suite. Either through acquisition of merchant portfolios or through resellers, the Company becomes a party or enters into contracts with a merchant and a sponsor bank. The Commercial Payments and Managed Services segment- represents services provided to certain enterprise customers, including outsourced sales force to those customers and accounts payable automation services to commercial customers. The company was founded on April 23, 2015 and is headquartered in Alpharetta, GA.
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