[Executive Summary](index=1&type=section&id=Executive%20Summary) Priority Technology Holdings, Inc. presents its strong Q2 2025 financial results and updated full-year 2025 guidance [Second Quarter 2025 Consolidated Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Consolidated%20Financial%20Highlights) Priority Technology Holdings, Inc. reported strong second-quarter 2025 financial results, driven by performance across its Unified Commerce Platform - The company's strong Q2 2025 results are attributed to the continued success of its Connected Commerce platform, with over **9% revenue growth** and **13% adjusted gross profit growth**[2](index=2&type=chunk) - Adjusted gross profit from recurring revenue represents **62% of total**, indicating a stable and predictable revenue base[2](index=2&type=chunk) Q2 2025 Consolidated Financial Highlights | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (%) | | :-------------------------- | :------------------ | :------------------ | :--------- | | Revenue | $239.8 | $219.9 | 9.1% | | Adjusted Gross Profit | $92.4 | $81.7 | 13.0% | | Adjusted Gross Profit Margin | 38.5% | 37.2% | +135 bps | | Operating Income | $37.4 | $33.2 | 12.6% | | Adjusted EBITDA | $56.0 | $51.6 | 8.7% | | Adjusted EPS | $0.26 | $0.11 | 136.4% | [Full Year 2025 Financial Guidance Update](index=2&type=section&id=Full%20Year%202025%20Financial%20Guidance%20Update) Priority Technology Holdings, Inc. updated its full-year 2025 financial guidance, narrowing ranges for revenue and adjusted EBITDA - The company expects an acceleration of organic growth in the second half of 2025 due to sales pipeline timing, year-over-year comparatives, and moderating headwinds[4](index=4&type=chunk) Full Year 2025 Financial Guidance | Metric | New FY 2025 Guidance (Millions) | Original FY 2025 Guidance (Millions) | Growth Rate (vs FY 2024) | | :-------------------- | :----------------------------- | :---------------------------------- | :----------------------- | | Revenue | $970 - $990 | $965 - $1,000 | 10.2% - 12.5% | | Adjusted Gross Profit | $365 - $380 | $360 - $385 | N/A | | Adjusted EBITDA | $222.5 - $227.5 | $220 - $230 | N/A | [Conference Call Details](index=2&type=section&id=Conference%20Call%20Details) Priority Technology Holdings, Inc. will host a conference call on August 7, 2025, to discuss its second-quarter financial results - A conference call to discuss Q2 2025 financial results will be held on Thursday, August 7, 2025, at **10:00 a.m. EDT**[5](index=5&type=chunk) - Access to the live webcast and accompanying slide presentation is available via the company's investor relations website[6](index=6&type=chunk) - An audio replay of the call will be available until **August 21, 2025**[7](index=7&type=chunk) [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles key non-GAAP financial measures used by the company to assess performance [Non-GAAP Measures Introduction](index=2&type=section&id=Non-GAAP%20Measures%20Introduction) The company uses non-GAAP financial measures like Adjusted Gross Profit and Adjusted EBITDA to evaluate business trends and performance - Non-GAAP measures are used to evaluate business and trends, measure performance, prepare financial projections, allocate resources, and make strategic decisions[8](index=8&type=chunk) - These non-GAAP measures are intended to complement GAAP measures and illustrate underlying financial and business trends, but are not superior to or a substitute for GAAP[8](index=8&type=chunk) [Adjusted Gross Profit and Adjusted Gross Profit Margin Reconciliation](index=3&type=section&id=Adjusted%20Gross%20Profit%20and%20Adjusted%20Gross%20Profit%20Margin%20Reconciliation) Adjusted gross profit, defined as revenues less cost of revenue (excluding D&A), is reconciled for Q2 and H1 2025 and 2024 - Adjusted gross profit excludes depreciation and amortization from cost of revenue to evaluate underlying profit trends[10](index=10&type=chunk) Adjusted Gross Profit and Margin Reconciliation | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------------- | :--------------------------------- | :------------------------------- | :------------------------------- | | Revenues | $239,812 | $219,867 | $464,442 | $425,586 | | Cost of revenue (excluding depreciation and amortization) | (147,399) | (138,118) | (284,752) | (267,416) | | **Adjusted gross profit** | **$92,413** | **$81,749** | **$179,690** | **$158,170** | | **Adjusted gross profit margin** | **38.5%** | **37.2%** | **38.7%** | **37.2%** | | Depreciation and amortization of revenue generating assets | (4,911) | (3,941) | (9,597) | (7,842) | | Gross profit | $87,502 | $77,808 | $170,093 | $150,328 | | Gross profit margin | 36.5% | 35.4% | 36.6% | 35.3% | [EBITDA and Adjusted EBITDA Reconciliation](index=3&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20Reconciliation) EBITDA and Adjusted EBITDA, which excludes non-cash and non-recurring items, are reconciled for Q2 and H1 2025 and 2024 - Adjusted EBITDA starts with EBITDA and excludes non-cash costs (e.g., stock-based compensation) and non-recurring expenses (e.g., acquisition integration, litigation settlements) to provide a clearer view of operational performance[11](index=11&type=chunk) EBITDA and Adjusted EBITDA Reconciliation | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------------- | :--------------------------------- | :------------------------------- | :------------------------------- | | Net income | $10,879 | $994 | $19,147 | $6,187 | | Interest expense | 23,054 | 21,710 | 46,230 | 42,590 | | Income tax expense | 4,423 | 2,515 | 6,673 | 5,097 | | Depreciation and amortization | 14,093 | 15,244 | 27,870 | 30,497 | | **EBITDA** | **$52,449** | **$40,463** | **$99,920** | **$84,371** | | Debt modification and extinguishment expenses | — | 8,623 | 38 | 8,623 | | Selling, general and administrative (non-recurring) | 395 | 636 | 2,594 | 1,435 | | Non-cash stock-based compensation | 3,206 | 1,829 | 4,792 | 3,462 | | **Adjusted EBITDA** | **$56,050** | **$51,551** | **$107,344** | **$97,891** | [Adjusted Earnings Per Share (Adjusted EPS) Reconciliation](index=5&type=section&id=Adjusted%20Earnings%20Per%20Share%20%28Adjusted%20EPS%29%20Reconciliation) Adjusted EPS, a performance measure excluding non-recurring and non-cash items, is reconciled for Q2 and H1 2025 and 2024 - Adjusted EPS is calculated by adjusting net income for items such as accelerated accretion expense, debt extinguishment costs, stock-based compensation, other non-recurring expenses, and amortization of acquisition-related intangible assets, along with their tax impact[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) Adjusted Earnings Per Share Reconciliation | (in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------------- | :--------------------------------- | :------------------------------- | :------------------------------- | | Net income (loss) attributable to common shareholders | $10,879 | $(17,629) | $19,147 | $(25,679) | | Accelerated accretion expense and excise tax attributable to redeemable senior preferred stockholders | — | 9,549 | — | 9,549 | | Debt extinguishment and modification costs | — | 8,623 | 38 | 8,623 | | Stock based compensation | 3,206 | 1,829 | 4,792 | 3,462 | | Other non-recurring expenses | 395 | 636 | 2,594 | 1,435 | | Amortization of acquisition related intangible assets | 9,417 | 11,425 | 18,731 | 23,117 | | Tax impact of adjustments | (3,244) | (5,855) | (6,800) | (9,526) | | **Adjusted net income attributable to common shareholders** | **$20,653** | **$8,578** | **$38,502** | **$10,981** | | Weighted average common shares outstanding (diluted) | 79,837 | 78,139 | 79,968 | 78,180 | | **Adjusted earnings per common share (Diluted)** | **$0.26** | **$0.11** | **$0.48** | **$0.14** | [Forward-Looking Non-GAAP Measures Disclosure](index=6&type=section&id=Forward-Looking%20Non-GAAP%20Measures%20Disclosure) The company does not reconcile forward-looking non-GAAP measures to GAAP due to the difficulty in estimating future reconciling items - Reconciliation of forward-looking non-GAAP measures to GAAP is not provided due to the unreasonable effort required to estimate future reconciling items like stock-based compensation expense[16](index=16&type=chunk) - The company primarily plans, forecasts, and analyzes future periods on a non-GAAP basis[16](index=16&type=chunk) [About the Company](index=7&type=section&id=About%20the%20Company) Priority Technology Holdings, Inc. provides a unified commerce engine offering payments and banking solutions for businesses - Priority provides a unified commerce engine that combines payables, merchant services, and banking and treasury solutions[19](index=19&type=chunk) - The platform helps businesses accelerate cash flow, optimize working capital, reduce costs, and unlock new revenue opportunities[19](index=19&type=chunk) [Forward-Looking Statements Disclaimer](index=7&type=section&id=Forward-Looking%20Statements%20Disclaimer) This press release contains forward-looking statements subject to risks and uncertainties, and actual results may differ materially - The press release includes forward-looking statements regarding future financial and operating results, plans, objectives, and intentions[21](index=21&type=chunk) - These statements are subject to significant business, economic, and competitive risks and uncertainties that could cause actual results to differ materially[21](index=21&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, and the company disclaims any obligation to publicly update or revise them[23](index=23&type=chunk) [Investor Relations Contact](index=7&type=section&id=Investor%20Relations%20Contact) Investor inquiries for Priority Technology Holdings, Inc. can be directed to the provided email address - Investor inquiries should be sent to **priorityIR@icrinc.com**[24](index=24&type=chunk) [Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Consolidated%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited consolidated statements of operations, balance sheets, and cash flows for the reported periods [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=8&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) The unaudited consolidated statements of operations show increased net income for Q2 and H1 2025, driven by revenue growth Consolidated Statements of Operations and Comprehensive Income (Loss) | (in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------------- | :--------------------------------- | :------------------------------- | :------------------------------- | | Revenues | $239,812 | $219,867 | $464,442 | $425,586 | | Total operating expenses | 202,462 | 186,693 | 394,467 | 364,389 | | Operating income | 37,350 | 33,174 | 69,975 | 61,197 | | Income before income taxes | 15,302 | 3,509 | 25,820 | 11,284 | | Net income | 10,879 | 994 | 19,147 | 6,187 | | Net income (loss) attributable to common stockholders | 10,879 | (17,629) | 19,147 | (25,679) | | Basic EPS | $0.14 | $(0.23) | $0.24 | $(0.33) | | Diluted EPS | $0.14 | $(0.23) | $0.24 | $(0.33) | [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show an increase in total assets and liabilities as of June 30, 2025, primarily due to settlement activities Consolidated Balance Sheets | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------------ | :-------------- | :---------------- | | **Assets** | | | | Cash and cash equivalents | $50,564 | $58,600 | | Settlement assets | 1,125,934 | 940,798 | | Total current assets | 1,305,885 | 1,105,085 | | Goodwill | 382,497 | 376,091 | | Intangible assets, net | 225,035 | 240,874 | | **Total assets** | **$2,027,420** | **$1,826,860** | | **Liabilities, Stockholders' Deficit and NCI** | | | | Settlement obligations | 1,127,266 | 940,213 | | Total current liabilities | 1,229,171 | 1,051,671 | | Long-term debt, net | 917,017 | 920,888 | | **Total liabilities** | **$2,171,554** | **$1,991,885** | | Total stockholders' deficit | (144,134) | (165,025) | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows indicate decreased operating cash flow but increased financing cash flow in H1 2025 Consolidated Statements of Cash Flows | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | | Net cash provided by operating activities | $27,080 | $42,007 | | Net cash used in investing activities | $(21,145) | $(20,598) | | Net cash provided by financing activities | $178,091 | $18,149 | | Net increase in cash and cash equivalents, and restricted cash | $184,026 | $39,558 | | Cash and cash equivalents and restricted cash at end of period | $1,177,890 | $835,781 | - The significant increase in net cash provided by financing activities in H1 2025 was largely driven by settlement obligations, which provided **$190,863 thousand**[30](index=30&type=chunk) [Reportable Segments' Results (Unaudited)](index=11&type=section&id=Reportable%20Segments%27%20Results%20%28Unaudited%29) This section details the unaudited financial performance of Priority's SMB, B2B, and Enterprise Payments segments [Segment Performance Overview (SMB, B2B, Enterprise)](index=11&type=section&id=Segment%20Performance%20Overview%20%28SMB%2C%20B2B%2C%20Enterprise%29) Priority's SMB, B2B, and Enterprise Payments segments show diversified performance in revenue and Adjusted EBITDA for Q2 and H1 2025 Segment Performance Overview **Three Months Ended June 30, 2025 vs 2024:** | Segment | Q2 2025 Revenue (Thousands) | Q2 2024 Revenue (Thousands) | Revenue Change (%) | Q2 2025 Adj. EBITDA (Thousands) | Q2 2024 Adj. EBITDA (Thousands) | Adj. EBITDA Change (%) | | :---------------- | :-------------------------- | :-------------------------- | :----------------- | :------------------------------ | :------------------------------ | :--------------------- | | SMB Payments | $163,230 | $155,101 | 5.2% | $27,749 | $28,597 | -3.0% | | B2B Payments | $25,033 | $21,881 | 14.4% | $3,770 | $1,530 | 146.4% | | Enterprise Payments | $52,658 | $43,670 | 20.6% | $45,558 | $37,244 | 22.3% | **Six Months Ended June 30, 2025 vs 2024:** | Segment | H1 2025 Revenue (Thousands) | H1 2024 Revenue (Thousands) | Revenue Change (%) | H1 2025 Adj. EBITDA (Thousands) | H1 2024 Adj. EBITDA (Thousands) | Adj. EBITDA Change (%) | | :---------------- | :-------------------------- | :-------------------------- | :----------------- | :------------------------------ | :------------------------------ | :--------------------- | | SMB Payments | $314,920 | $299,105 | 5.3% | $53,454 | $53,620 | -0.3% | | B2B Payments | $48,951 | $43,225 | 13.2% | $7,286 | $3,276 | 122.4% | | Enterprise Payments | $102,746 | $84,660 | 21.4% | $88,001 | $71,971 | 22.3% | - Enterprise Payments showed strong growth in average CFTPay billed clients (**992,279 in Q2 2025** vs **762,873 in Q2 2024**) and monthly new enrollments (**57,818 in Q2 2025** vs **55,416 in Q2 2024**)[32](index=32&type=chunk) - B2B issuing dollar volume decreased in both Q2 and H1 2025 compared to 2024, despite revenue and Adjusted EBITDA growth in the segment[32](index=32&type=chunk) [Reconciliation of Adjusted EBITDA to GAAP Measure by Segment](index=12&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA%20to%20GAAP%20Measure%20by%20Segment) Detailed reconciliations of Adjusted EBITDA to GAAP Income (loss) before taxes are provided for each reportable segment and corporate overhead - The reconciliation tables provide a detailed breakdown of adjustments from Adjusted EBITDA to Income (loss) before taxes for each segment and the corporate overhead[34](index=34&type=chunk)[36](index=36&type=chunk) - Corporate expenses, including interest, depreciation, non-recurring SG&A, and stock-based compensation, significantly impact the consolidated income before taxes[34](index=34&type=chunk)[36](index=36&type=chunk)

Core Insights - Priority Technology Holdings, Inc. (PRTH) is set to report its second-quarter 2025 results on August 7, with revenue expectations of $241.8 million, reflecting a 10% year-over-year increase, and earnings per share (EPS) estimated at 25 cents, indicating over 100% growth from the previous year [1][7] Financial Performance - The consensus estimate for Q2 revenues is $241.8 million, with an EPS of $0.25, both showing strong year-over-year growth [7] - PRTH's first-quarter earnings surprise was 10%, indicating a positive trend in financial performance [2] - The company has shown a 9% year-over-year revenue increase in Q1 2025, with gross margin and adjusted EBITDA rising by 14% and 11%, respectively [16] Market Position - PRTH's current P/E ratio stands at 5.45X, significantly lower than the industry average of 22.89X, suggesting it is undervalued compared to peers [11] - Despite a 45.2% increase in stock price over the past year, PRTH has underperformed compared to its industry, which saw a 69.3% rise [8] Growth Drivers - The global digital payment market is projected to grow at a CAGR of 21.4% from 2025 to 2030, providing PRTH with opportunities to capture market share [15] - The company's platform is designed to foster long-term partnerships and enhance operational efficiency across various industry segments [5][19] Challenges - PRTH faces potential margin pressures from changes in card fees and banking regulations, as well as operational disruptions from delays in the rollout of its One Priority system [18][20] - The company currently has an Earnings ESP of 0.00% and a Zacks Rank of 3, indicating a low probability of an earnings beat in the upcoming report [4][7]

Image Source: Zacks Investment Research Key Takeaways The bulls appear firmly in charge as we inch closer to July, fueled by tech earnings growth and trade war progress. Even though the market dipped on Friday, investors are largely shaking off recent concerns about the escalating conflict in the Middle East. Wall Street has largely held its ground in June, content to chop around above the Nasdaq and the S&P 500's 21- day moving averages and below their all-time highs. The calm stretch came after the furiou ...

Market Overview - The stock market is experiencing a new wave of uncertainty due to geopolitical tensions and weaker-than-expected economic data, particularly in U.S. retail sales for May [1][2] - The Israel-Iran conflict has escalated, contributing to investor unease [1] - The upcoming Federal Reserve meeting is a focal point, with expectations that weak economic data may lead to a more dovish stance from policymakers [2] Investment Strategy - In the current volatile market environment, a value investing approach focusing on fundamentally strong companies with reasonable prices is recommended [3] - Companies with high earnings yields are highlighted as potential investment opportunities [3] Earnings Yield Insights - Earnings yield is a key metric for assessing potential returns, calculated by dividing earnings per share by stock price [4] - A higher earnings yield may indicate undervaluation, while a lower yield could suggest overvaluation [5] - Comparing earnings yield to the yield on 10-year Treasury bonds can help determine investment worthiness [5] Screening Criteria - The primary screening criterion is an earnings yield greater than 10% [6] - Additional parameters include estimated EPS growth exceeding the S&P 500 and an average daily trading volume of at least 100,000 shares [7][6] - Stocks must also have a current price of $5 or more [8] Selected Stocks - Five stocks with earnings yields above 10% and strong growth potential have been identified: - **Aris Mining Corporation (ARMN)**: Expected earnings growth of 226% and 81% for 2025 and 2026, respectively, with a Zacks Rank 1 [10] - **Quanex Building Products Corporation (NX)**: Projected earnings growth of 19.6% and 14% for 2025 and 2026, respectively, also with a Zacks Rank 1 [11] - **Heritage Insurance Holdings, Inc. (HRTG)**: Anticipated earnings growth of 62% and 13% for 2025 and 2026, respectively, with a Zacks Rank 1 [12] - **Popular, Inc. (BPOP)**: Expected earnings growth of 17% and 20% for 2025 and 2026, respectively, holding a Zacks Rank 1 [13] - **Priority Technology Holdings Inc. (PRTH)**: Projected earnings growth of 108% and 34% for 2025 and 2026, respectively, with a Zacks Rank 1 [14]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than the traditional "buying low and selling high" approach, aiming for quicker profits [1] Group 1: Momentum Investing Strategy - Investors are attracted to fast-moving stocks, but determining the right entry point can be challenging, as stocks may lose momentum if future growth does not justify their high valuations [2] - A safer strategy involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify promising stocks [3] Group 2: Case Study - Priority Technology (PRTH) - PRTH has shown a four-week price change of 5.7%, indicating growing investor interest and recent price momentum [4] - Over the past 12 weeks, PRTH gained 0.8%, with a beta of 1.51, suggesting it moves 51% more than the market in either direction [5] - PRTH has a Momentum Score of B, indicating a favorable time to invest, and it has a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates [6][7] - The stock is trading at a Price-to-Sales ratio of 0.71, meaning investors pay 71 cents for each dollar of sales, indicating a reasonable valuation [7] Group 3: Additional Opportunities - Besides PRTH, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Core Insights - The article discusses the author's academic and professional background in Machine Learning, Economics, and Finance, highlighting affiliations with prestigious institutions and experience in financial advisory, particularly in banking and mergers & acquisitions [1]. Group 1 - The author holds a PhD in Machine Learning with a focus on Economics and Finance [1]. - The author has academic affiliations with IESE Business School, ESADE Business School, and the Barcelona Supercomputing Center [1]. - The professional experience includes working at Deloitte Financial Advisory, specializing in banking and mergers & acquisitions [1]. Group 2 - The author's interests include machine learning and generative AI applications in finance and economics [1]. - The author is proficient in programming languages such as Python, R, and SQL [1].

Market Overview - Wall Street experienced significant gains in May, with the S&P 500 increasing by 6.2% and the Nasdaq rising by 9.6%, marking the best month for both indices since late 2023 [1] - Investor optimism was fueled by a temporary pause on new trade tariffs announced by Trump, alleviating fears regarding trade tensions with China and the EU [1] Geopolitical Risks - Despite the temporary relief, the threat of tariffs remains, as China accused the U.S. of violating their trade truce by tightening controls on AI chip exports and student visas, which has raised tensions again [2] - The interconnectedness of the U.S. and Chinese economies means that even minor disputes can significantly impact market stability [2] Investment Strategy - In uncertain times, investors are turning to value investing, focusing on companies with strong fundamentals that are undervalued [3] - Value stocks with high earnings yield can provide attractive returns, especially during periods of market volatility [4] Earnings Yield - Earnings yield is calculated by dividing a company's annual earnings per share (EPS) by its current stock price, indicating potential returns for investors [5] - A higher earnings yield suggests a stock may be undervalued compared to its peers, while a lower yield may indicate overvaluation [5][7] Stock Screening Criteria - A primary screening criterion for selecting stocks is an earnings yield greater than 10%, supplemented by estimated EPS growth, average daily volume, and current price thresholds [8][9][10] - Stocks with a Zacks Rank of 1 (Strong Buy) or 2 (Buy) are expected to outperform their peers [10] Selected Value Stocks - Five value stocks with earnings yields exceeding 10% have been identified as appealing options amid rising U.S.-China tensions: AngloGold Ashanti (AU), Orchid Island Capital (ORC), LATAM Airlines (LTM), Priority Technology (PRTH), and Allianz (ALIZY) [11] - All five stocks show strong projected EPS growth through 2026 and meet liquidity, price, and growth criteria [11] Company Highlights - **AngloGold Ashanti (AU)**: Expected earnings growth of 95% in 2025 and 6.7% in 2026, with a Zacks Rank of 1 and a Value Score of A [12] - **Orchid Island Capital (ORC)**: Projected earnings growth of 394% in 2025 and 24.5% in 2026, Zacks Rank 1, Value Score B [13] - **LATAM Airlines (LTM)**: Anticipated earnings growth of 27.5% in 2025 and 20% in 2026, Zacks Rank 1, Value Score A [14] - **Priority Technology (PRTH)**: Expected earnings growth of 108% in 2025 and 34% in 2026, Zacks Rank 1, Value Score A [15] - **Allianz (ALIZY)**: Projected earnings growth of 16.4% in 2025 and 9% in 2026, Zacks Rank 1, Value Score B [16]

Core Viewpoint - Priority Technology (PRTH) shows potential for significant upside, with a mean price target of $12.80 indicating a 67.1% increase from the current price of $7.66 [1] Price Targets and Analyst Estimates - The mean estimate consists of five short-term price targets with a standard deviation of $2.77, indicating variability among analysts [2] - The lowest estimate of $10 suggests a 30.6% increase, while the highest estimate predicts a surge of 108.9% to $16 [2] - Analysts' price targets can often mislead investors, as empirical research shows they rarely indicate actual stock price movements [7][10] Earnings Estimates and Analyst Agreement - Analysts have shown increasing optimism regarding PRTH's earnings prospects, with a strong consensus in revising EPS estimates higher [11] - The Zacks Consensus Estimate for the current year has risen by 1.9% over the past month, with one estimate increasing and no negative revisions [12] - PRTH holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates [13]

Industry Overview - The Technology Services industry has experienced strong growth post-pandemic, driven by the rapid adoption of remote work and advancements in technology such as 5G, blockchain, AI, and ML [1][6] - The industry includes companies involved in software support, data processing, computing hardware, and communications equipment, serving both consumer and business markets [3] Economic Factors - The industry is benefiting from a recovering economy, with GDP growth projected at an annual rate of 2.8% in 2024, up from 2.5% in 2023 [5] - The Services PMI has remained above 50% for 56 out of the last 59 months, indicating healthy economic activity [5] Technological Advancements - The global shift towards digitization is creating opportunities in markets such as 5G, blockchain, and AI, with generative AI expected to grow at a 42% CAGR over the next decade, reaching a $1.3 trillion market by 2032 [6] Industry Performance - The Zacks Technology Services industry ranks 49, placing it in the top 20% of over 246 Zacks industries, indicating a promising outlook [7] - Over the past year, the industry has outperformed the broader Zacks Business Services sector and the S&P 500, returning 42.1% compared to 12% and 12.4% respectively [9] Valuation Metrics - The industry is currently trading at an EV-to-EBITDA ratio of 31.02X, significantly higher than the S&P 500's 16.6X and the sector's 12.03X [12] Company Highlights - **AppLovin Corporation (APP)**: Focuses on a software platform for advertisers, enhancing machine-learning models and AI integration. The company has a Zacks Rank 1 and is expected to see earnings rise 85.2% year over year in 2025, with shares up 340.5% in the past year [20][18][19] - **Priority Technology Holdings (PRTH)**: Operates a platform for financial operations, showing strong growth despite economic challenges. PRTH also holds a Zacks Rank 1, with earnings expected to rise over 100% year over year in 2025, and shares up 116.8% in the past year [24][23] - **Qifu Technology (QFIN)**: A China-based credit tech company improving user acquisition and integrating AI for better credit data analysis. QFIN has a Zacks Rank 1, with earnings expected to rise 22.4% year over year in 2025, and shares up 113.7% in the past year [29][27]

Industry Overview - The technology services industry is mature with strong demand for services, and revenues, income, and cash flows are expected to gradually return to pre-pandemic levels, supporting stable dividends for most players [1] - The industry thrived in 2024 and continued its momentum into the first quarter of 2025 [1] - The global shift towards digitization is creating opportunities in markets such as 5G, blockchain, and artificial intelligence (AI), with companies rapidly adopting generative AI, machine learning (ML), and data science to gain competitive advantages [4] Investment Outlook - The Zacks-defined Technology Services industry ranks within the top 26% of Zacks Ranked Industries, indicating an expectation to outperform the market over the next three to six months [2] - Five mid and small-sized technology services stocks with strong short-term upside potential are recommended: Byrna Technologies Inc. (BYRN), Climb Global Solutions Inc. (CLMB), Adeia Inc. (ADEA), Priority Technology Holdings Inc. (PRTH), and Ivanhoe Electric Inc. (IE) [2][3] Company Highlights Byrna Technologies Inc. (BYRN) - Engaged in developing and selling less-lethal personal security solutions across multiple regions [6] - Average short-term price target indicates a potential increase of 48.6% from the last closing price of $25.53, with a target range of $33-$38 [8] - Expected revenue and earnings growth rates for the current year are 30.2% and 12.9%, respectively [9] Climb Global Solutions Inc. (CLMB) - Operates as a value-added IT distribution and solutions company [10] - Average short-term price target suggests a potential increase of 26.2% from the last closing price of $110.28, with a target range of $136 [13] - Expected revenue and earnings growth rates for the current year are 5% and 2.7%, respectively [14] Adeia Inc. (ADEA) - Operates as a media and semiconductor intellectual property licensing company [16] - Average short-term price target indicates a potential increase of 25.2% from the last closing price of $13.75, with a target range of $17-$18 [18] - Expected revenue and earnings growth rates for the current year are 9.2% and 7.1%, respectively [18] Priority Technology Holdings Inc. (PRTH) - Functions as a payment technology company with multiple segments [20] - Average short-term price target suggests a potential increase of 71.6% from the last closing price of $7.46, with a target range of $10-$16 [24] - Expected revenue and earnings growth rates for the current year are 11.4% and over 100%, respectively [25] Ivanhoe Electric Inc. (IE) - Focuses on minerals exploration and development, particularly for electrification [27] - Average short-term price target indicates a potential increase of 105.9% from the last closing price of $6.85, with a target range of $10-$20 [28] - Expected revenue and earnings growth rates for the current year are 2.6% and 51.4%, respectively [28]