DA Davidson maintains Buy on Repay stock with $12 target

On Tuesday, Repay Holdings Corporation (NASDAQ:RPAY), currently trading at $3.95, received reaffirmation of a Buy rating and a $12.00 price target from DA Davidson, following the company’s first-quarter earnings report. Repay’s revenue and adjusted EBITDA surpassed both DA Davidson’s projections and the consensus estimates. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculation, with analysts’ targets ranging from $4.50 to $12.00.

The company, which specializes in integrated payment processing solutions, disclosed its financial outcomes for the first quarter of 2025, noting a strong performance that exceeded expectations. While not profitable over the last twelve months, the company maintains robust liquidity with a current ratio of 3.71 and an impressive gross profit margin of 77.03%. This announcement came alongside the news that Repay’s Board has decided to conclude the strategic review process initiated in early March.

In addition to reporting on past performance, Repay’s management provided a forward-looking perspective with limited guidance for the year 2025. They forecast a sequential quarterly increase in normalized gross profit growth throughout the year, signaling a positive trajectory for the company’s financial health. The stock has shown recent momentum with an 8.89% return over the past week, though it remains significantly below its 52-week high of $11.27. InvestingPro subscribers can access 8 additional exclusive insights about Repay’s financial health and growth prospects.

Repay’s conclusion of the strategic review and its promising guidance for the upcoming quarters appear to have contributed to DA Davidson’s decision to maintain a positive outlook on the company’s stock. The $12.00 price target suggests that DA Davidson sees potential for growth in Repay’s market value.

Investors and market watchers may view this maintained Buy rating and price target as a signal of Repay’s robust financial performance and its strategic positioning for continued growth in the integrated payment processing industry.

In other recent news, Repay Holdings Corporation reported its first-quarter 2025 earnings, revealing an earnings per share (EPS) of negative $0.09, which missed the forecasted $0.22. Revenue for the quarter came in at $77.3 million, falling short of the expected $83.92 million, marking a 4% year-over-year decline. Despite these challenges, Repay’s Business Payments segment showed a 12% year-over-year increase in gross profit, excluding political media contributions, signaling a positive trend for future growth. The company has introduced its fiscal year 2025 guidance, forecasting high single-digit to low double-digit growth in gross profit by the fourth quarter.

In related developments, several analyst firms have adjusted their price targets for Repay. UBS has reduced its target from $7.50 to $4.50 while maintaining a Neutral rating, and BMO Capital Markets has lowered its target from $7.00 to $5.00, keeping a Market Perform rating. Keefe, Bruyette & Woods also cut their target to $4.50 from $6.50, maintaining a Market Perform stance. These revisions follow the completion of Repay’s strategic review, which emphasized increased investment in organic growth and the Enterprise direct sales channel. Analysts have noted signs of stabilization in Repay’s organic growth, despite previous client losses, and expect an uptick in gross profit growth by the end of 2025.

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