In a remarkable display of market confidence, Priority Technology Holdings, Inc. (PRTH) stock has surged to a 52-week high, touching a price level of $10.52. According to InvestingPro data, the company's stock appears slightly undervalued, with analysts setting price targets as high as $16. This peak reflects a significant turnaround for the company, which has seen its stock value climb by an impressive 192.2% over the past year. The $784 million market cap company has demonstrated solid fundamentals with 16% revenue growth and maintains a "GOOD" financial health score according to InvestingPro's comprehensive analysis. Investors have rallied behind PRTH's strategic initiatives and growth prospects, propelling the stock to new heights and signaling strong optimism for the payment processing solutions provider's future performance. Discover more insights and 8 additional ProTips for PRTH with an InvestingPro subscription.
In other recent news, Priority Technology Holdings Inc. has reported robust growth in its Q3 2024 earnings, with a 20% year-over-year increase in revenue to $227 million, and a 22% rise in adjusted EBITDA to $54.6 million. This positive performance led to an upward revision of full-year revenue guidance to between $875 million and $883 million, and adjusted EBITDA guidance to $200 million to $204 million. This development has been noted by Lake Street Capital Markets, which maintained a Buy rating on the company's stock and increased the price target to $13.00 from $8.00.
The company's recent redemption of its remaining preferred shares and accrued dividends, totaling $116 million, financed by an increase in term debt, was also highlighted. This action simplifies the company's capital structure, according to Lake Street Capital Markets. Despite a recent uptick in stock price, the company's shares are still trading at a discount, priced at 6.8 times its projected 2025 EBITDA, compared to its peers in the payment processing industry, which trade at an average of 12.5 times EBITDA.
These recent developments suggest that Priority Technology is on a solid growth path, with analysts seeing potential for recurring revenue growth and a closing of the valuation gap. As the company continues to use its improved cash flow to reduce its debt, it is expected to benefit further from the natural de-levering effect of EBITDA growth.
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