Priority Technology Holdings, Inc. PRTH stock has shown remarkable growth over the past year. The stock has gained 227.3%, outperforming the industry's 53.6% rally and the Zacks S&P 500 composite's 18.5% growth.

One Year Price Performance

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PRTH has performed better than its industry peers, such as Byrna Technologies Inc. BYRN and Cellebrite CLBT. BYRN has gained 129.8% and CLBT has returned 59.1% over the same period.

In the last trading session, the PRTH stock closed at $10.55, 18.2% down from the 52-week high of $12.47. The stock is trading above its 50-day moving average, indicating bullish sentiment among investors.

The question of whether Priority Technology serves as a buying opportunity after rallying for the past year needs to be answered. Let us find out.

Reseller Growth: Road to PRTH’s Long-Term Success

In 2023, Priority Technology had nearly 1,200 partners with whom it maintained strong reseller relationships. Furthermore, the company reported that one reseller contributed more than 10% of the total bankcard processing volume and represented 14% of its total bankcard processing volume in 2023.

In the third quarter of 2024, management stated resellers to be the company’s key growth driver. The 9.7% year-over-year growth in merchant bankcard processing dollar value in the third quarter of 2024 could be a testament to management’s remarks. PRTH aims to expand its distribution network to reach new partners, and we believe that its technology offerings can attract and retain high-quality resellers focused on growth.

By offering resellers agile tools to manage their sales and grow their merchant portfolio, the company can acquire and retain merchants. Being a consultative partner is instrumental to maintaining strong relationships with resellers and improving volume growth trends.

Mobile Payment Market Expansion Drives PRTH’s Top Line

Priority Technology is well-positioned to capitalize on the surge in the global mobile payment market. It was valued at $88.5 billion in 2024 and is expected to witness a CAGR of 38% from 2025 to 2030. Improved safety, ease of use, quick functions, inexpensive operations and widespread Internet access have driven the market. The market is anticipated to grow on the back of the surge in smartphone usage, easy access to high-speed Internet, and the preference of global and domestic businesses towards offering alternative mobile payment via official platforms.

The company’s strong performance in the third quarter of 2024 led to a 20.1% rise in the top line year over year. Key metrics such as merchant bankcard processing dollar value and B2B issuing dollar volume improved, demonstrating PRTH’s ability to leverage market trends efficiently. In the enterprise payments segment, the company observed 40.9% year-over-year growth in average billed clients, and the average monthly new enrolments rose 11.7%, highlighting its ability to successfully execute innovative strategies.
Priority Technology is poised to continue its upward trajectory as the demand for mobile payment technologies grows by providing efficient payment infrastructure and indulging in innovative solutions.

PRTH Stock Looks Undervalued

Priority Technology shares look cheap and appealing to investors. It is priced at 12.8 times forward 12-month earnings per share, which is lower than the industry’s average of 41.5 times.

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When looking at the trailing 12-month EV-to-EBITDA ratio, PRTH is trading at 8.2 times, way below the industry’s average of 87.3 times.

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Priority Technology’s Robust Liquidity Position

The company has a current ratio of 1.04 at the end of the third quarter, lower than the industry’s 2.21. Despite being lower than the industry, the increase in cash and cash equivalent resulted in the metric growth from the preceding quarter’s 1.03 and the year-ago quarter’s 1.02. Also, there is no denying the fact that PRTH has efficient short-term debt coverage capability, evident from a current ratio above 1.

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PRTH’s Improving Top & Bottom-Line Outlook

The Zacks Consensus Estimate for the company’s 2024 revenues is $878.8 million, indicating 16.3% growth from the year-ago reported level. For 2025, the top line is anticipated to rise 12% on a year-over-year basis.

The consensus estimate for loss in 2024 is 20 cents per share compared with the year-ago quarter’s loss of 63 cents per share. For 2025, the bottom line is expected to rise more than 100% year over year.

Hurry Up & Buy Priority Technology Now

The expanding mobile payment market positions PRTH for long-term gains. This growth is further reinforced by the company’s strive to acquire and retain reseller partners. The stock’s discounted valuation serves as an appealing investment opportunity. Greater returns on capital than the industry and a robust liquidity position are testaments to PRTH’s financial stability. A strong top-line prospect, underpinned by the aforementioned factors, is the cherry on top. Hence, we recommend that investors should buy the stock now and benefit from the long-term capital appreciation.

Priority Technology has a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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