Priority Technology (NASDAQ:PRTH) Posts Earnings Results, Beats Expectations By $0.06 EPS

Key Points

• Priority Technology beat Q1 expectations by reporting adjusted EPS of $0.28 versus the $0.22 consensus, while revenue rose to $249.6 million, also topping estimates.
• Growth was driven by Payables and Treasury, which posted revenue gains of 35.6% and 17.5%, respectively, and together made up about 63% of adjusted gross profit.
• The company reaffirmed full-year guidance and said it ended the quarter with about $192 million in liquidity, $28 million in free cash flow, and net leverage improved to roughly 4.0x.

Priority Technology (NASDAQ:PRTH - Get Free Report) posted its quarterly earnings data on Monday. The company reported $0.28 EPS for the quarter, beating analysts' consensus estimates of $0.22 by $0.06, FiscalAI reports. The business had revenue of $249.56 million for the quarter, compared to analyst estimates of $242.87 million. Priority Technology had a negative return on equity of 66.50% and a net margin of 5.84%.

Here are the key takeaways from Priority Technology's conference call:

• Strong Q1 results — revenue of $249.6M (+11%), adjusted gross profit $98.8M (+13%), adjusted EBITDA $58.1M (+13%) and adjusted EPS $0.28 (+27%).
• Payables and Treasury drove growth — Payables revenue +35.6% and Treasury +17.5%, together accounting for ~63% of adjusted gross profit and increasing the share of recurring, higher-value revenue.
• Margin mix pressures — Payables gross margin declined ~210 bps and Treasury margins ~370 bps due to mix shifts, lower-margin acquisitions and GAAP gross-vs-net recognition effects that could weigh on segment margins.
• Balance sheet and guidance maintained — $1.02B debt, ~$192M liquidity, net leverage ~4.0x (improved from 4.2x), $28M free cash flow in Q1, and full-year revenue and adjusted EBITDA guidance reaffirmed.
• Merchant solutions mixed — merchant revenue up 6.7% and card volume +2.5%, but average merchant accounts edged down and some verticals (restaurants, construction, legal) remain soft while real estate and retail showed strength.

Priority Technology Trading Up 4.4%

Shares of Priority Technology stock traded up $0.25 during trading hours on Monday, reaching $5.87. The stock had a trading volume of 561,719 shares, compared to its average volume of 291,399. The firm has a 50 day simple moving average of $5.14 and a two-hundred day simple moving average of $5.58. The firm has a market capitalization of $483.45 million, a price-to-earnings ratio of 8.51 and a beta of 1.49. Priority Technology has a 1 year low of $4.44 and a 1 year high of $8.89.

Hedge Funds Weigh In On Priority Technology

A number of large investors have recently modified their holdings of PRTH. AQR Capital Management LLC purchased a new position in shares of Priority Technology in the 1st quarter worth about $2,292,000. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. raised its holdings in shares of Priority Technology by 25.5% in the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 13,030 shares of the company's stock worth $89,000 after purchasing an additional 2,648 shares during the period. NewEdge Advisors LLC raised its holdings in shares of Priority Technology by 1,134.1% in the 1st quarter. NewEdge Advisors LLC now owns 15,759 shares of the company's stock worth $107,000 after purchasing an additional 14,482 shares during the period. Strs Ohio purchased a new stake in shares of Priority Technology during the 1st quarter valued at about $46,000. Finally, Rhumbline Advisers raised its holdings in shares of Priority Technology by 10.2% during the 1st quarter. Rhumbline Advisers now owns 26,131 shares of the company's stock valued at $178,000 after buying an additional 2,425 shares during the period. 11.52% of the stock is currently owned by hedge funds and other institutional investors.

Analyst Ratings Changes

A number of analysts have issued reports on PRTH shares. TD Securities decreased their price target on Priority Technology from $10.00 to $9.00 and set a "buy" rating on the stock in a research note on Wednesday, March 11th. Zacks Research lowered Priority Technology from a "hold" rating to a "strong sell" rating in a research note on Wednesday, March 11th. Weiss Ratings reissued a "hold (c)" rating on shares of Priority Technology in a research note on Friday, March 27th. TD Cowen decreased their price target on Priority Technology from $10.00 to $9.00 and set a "buy" rating on the stock in a research note on Wednesday, March 11th. Finally, Wall Street Zen lowered Priority Technology from a "buy" rating to a "hold" rating in a research note on Saturday. Three research analysts have rated the stock with a Buy rating, two have given a Hold rating and one has assigned a Sell rating to the company's stock. According to data from MarketBeat.com, the stock presently has a consensus rating of "Hold" and a consensus price target of $8.75.

Priority Technology Company Profile

Priority Technology Acquisition Corp is a special purpose acquisition company formed to effect a merger, capital stock exchange, asset acquisition, stock purchase, recapitalization or similar business combination with one or more businesses in the technology sector. As a blank-check company, it does not conduct any operations of its own and holds the proceeds from its initial public offering in a trust account pending the identification and completion of a business combination.

The company’s management team is focused on evaluating target businesses that offer scalable technology products or services, including software, digital platforms and related infrastructure.

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