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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
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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.
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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.
Image Source: Zacks Investment Research
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.