Priority Technology Skyrockets 227% in a Year: Should You Buy it?

Core Viewpoint - Priority Technology Holdings, Inc. (PRTH) has demonstrated significant stock growth of 227.3% over the past year, outperforming both the industry and the S&P 500 composite [1][4]. Company Performance - PRTH's stock closed at $10.55, which is 18.2% lower than its 52-week high of $12.47, yet it is trading above its 50-day moving average, indicating positive investor sentiment [4]. - The company has nearly 1,200 partners and relies on strong reseller relationships, with one reseller contributing over 10% of its total bankcard processing volume in 2023 [6][7]. - In Q3 2024, PRTH reported a 9.7% year-over-year growth in merchant bankcard processing dollar value, highlighting the effectiveness of its reseller strategy [7]. Market Position - The global mobile payment market, valued at $88.5 billion in 2024, is expected to grow at a CAGR of 38% from 2025 to 2030, providing a favorable environment for PRTH [9][10]. - PRTH's top line rose by 20.1% year-over-year in Q3 2024, with significant improvements in key metrics such as merchant bankcard processing dollar value and B2B issuing dollar volume [11]. Financial Metrics - PRTH shares are currently priced at 12.8 times forward 12-month earnings per share, significantly lower than the industry average of 41.5 times, indicating a potentially undervalued stock [13]. - The trailing 12-month EV-to-EBITDA ratio for PRTH is 8.2 times, compared to the industry's average of 87.3 times, further suggesting an attractive valuation [15]. Liquidity and Growth Outlook - The company's current ratio stands at 1.04, which, while lower than the industry average of 2.21, shows improvement from previous quarters, indicating effective short-term debt coverage [17]. - The Zacks Consensus Estimate projects PRTH's 2024 revenues at $878.8 million, reflecting a 16.3% growth year-over-year, with expectations for continued growth into 2025 [19]. Investment Recommendation - The expanding mobile payment market and PRTH's efforts to enhance its reseller partnerships position the company for long-term growth, making it an appealing investment opportunity [20].