Analyst Bryan Bergin from TD Cowen maintained a Buy rating on Priority Technology Holdings and decreased the price target to $10.00 from $11.00.
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Bryan Bergin has given his Buy rating due to a combination of factors that suggest potential for future growth despite recent setbacks. The stock experienced a significant decline following a third-quarter revenue miss and a downward revision of the fiscal year 2025 outlook, which was unexpected after a strong second-quarter performance. However, Bergin notes that there are identifiable drivers for improvement, such as new large relationships in the Merchant segment and the countercyclical nature of the Payable and Treasury businesses, which help maintain earnings power.
Furthermore, Bergin believes that the current stock price reaction is overly negative, considering the company’s earnings potential and free cash flow projections. He highlights that the stock’s valuation is notably low, with an implied price-to-earnings ratio of 4x based on the fiscal year 2026 earnings power. While acknowledging the challenging market environment, Bergin suggests that the stock’s low valuation offers room for expansion once more stable results are presented, justifying the Buy rating.
In another report released today, Lake Street also maintained a Buy rating on the stock with a $13.00 price target.