Priority Technology Holdings, Inc. PRTH stock has plummeted 31.8% over the past three months against the industry's 4.6% decline and the Zacks S&P 500 composite's 4.9% fall.
Three-Month Price Performance
While the three-month performance paints a dull picture, looking at the one-year movement is vital for a better understanding of the stock. PRTH has skyrocketed 150% over the past year, implying that the stock is currently in a correction phase.
The recent correction in Priority Technology’s shares might be appealing to investors. However, the vital question arises — is this the right time to invest? Let us find out.
PRTH’s Top Line Gains From Mobile Payment Market Expansion
The global mobile payment market is valued at $88.5 billion in 2024 and is anticipated to grow, seeing a CAGR of 38% from 2025 to 2030. Priority Technology is well-positioned to benefit from this expansive market.
The company’s strong performance in the fourth quarter of 2024 resulted in a 13.9% year-over-year rise in the top line. Merchant bankcard processing dollar value and B2B issuing dollar volume improved 6.6% and 13.5% from the year-ago quarter, respectively, demonstrating PRTH’s ability to leverage market trends efficiently.
In the enterprise payments segment, the company witnessed 37% year-over-year growth in average billed clients, and the average monthly new enrolments gained 7.8%, indicating its ability to execute innovative strategies successfully.
Improvement across the metrics is a testament to PRTH’s ability to navigate the dynamic digital finance landscape successfully. Its ability to provide seamless transactions can draw more customers, thereby capturing a higher market share in an expanding global mobile payment market, boosting its top line.
Priority Technology Stock Looks Undervalued
PRTH shares look cheap and appealing to investors. It is priced at 10.3 times forward 12-month earnings per share, which is lower than the industry’s average of 32.7 times.
When looking at the trailing 12-month EV-to-EBITDA ratio, Priority Technology is trading at 6.7 times, way below the industry’s average of 22.8 times.
PRTH’s Robust Liquidity Position
The company has a current ratio of 1.05 at the end of the fourth quarter, lower than the industry’s 1.65. The metric has increased marginally from the preceding and year-ago quarter on the back of increased cash reserve. Also, a current ratio of more than 1 suggests efficient debt coverage capability.
Priority Technology’s Promising Top & Bottom-Line Outlook
The Zacks Consensus Estimate for the company’s 2025 revenues is $985.5 million, suggesting 12% growth from the year-ago reported level. For 2026, the top line is anticipated to rise 12% on a year-over-year basis.
The consensus estimate for earnings in 2025 is pegged at 69 cents per share, implying a 35.3% year-over-year growth. For 2026, the bottom line is expected to rise 58% year over year.
PRTH Faces Fierce Competition Within Payments Industry
Despite carving a niche for itself in the small and medium-sized business, and business-to-business markets, PRTH is still not counted among the top-tier players such as Payoneer Global Inc. PAYO and Corpay, Inc. CPAY. Competition is significantly high within the payments industry, wherein large financial institutions and fintech companies are fighting to capture a piece of the market share.
Priority Technology’s competitors have more resources and better brand value, which could result in pricing pressure, thereby creating difficulty in retaining and acquiring customers. To stay ahead of the game, investment in technology and talent might be necessary, resulting in difficulty in balancing growth and profitability.
Referral Partners’ Exit May Affect Priority Technology’s Top Line
The agreement termination of referral partners or any consolidation can affect PRTH’s business growth. A process of consolidation that does not include the company might birth large market players and affect Priority Technology’s business model. Moreover, the lack of innovation offered to customers could deteriorate the company’s ability to deliver top-line growth, thereby hurting the stock price.
Wait for the Right Moment to Invest in PRTH
The expanding global mobile payment market positions Priority Technology for long-term growth. A discounted stock is attractive to investors. A robust liquidity position reassures its strong financial position. Positive top and bottom-line prospects are added advantages.
However, the stock’s recent performance concludes that PRTH has been riding through a correction phase. Therefore, a cautious approach must be taken, and we recommend investors to stay put and watch for further adjustments in share prices before buying.
Priority Technology has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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