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On Thursday, Keefe, Bruyette & Woods maintained an Outperform rating on Priority Technology Holdings Inc. (NASDAQ: PRTH) but lowered the price target from $14.00 to $12.00. The adjustment was made following a 15% decline in the company’s shares after the Q4 earnings report. The report met the previously announced figures, and the firm’s 2025 guidance was confirmed. Despite this, investor concerns over macroeconomic conditions led to the stock’s drop.
The decline in Priority Technology’s shares was attributed to a broader risk-off sentiment among investors, who are increasingly wary of potential economic downturns. Since mid-February, the company’s shares have fallen 36%, reflecting the market’s reaction to the uncertain economic climate. Analyst Timothy Switzer of Keefe, Bruyette & Woods emphasized that, while the macro environment is challenging, Priority Technology’s long-term outlook is improving.
Switzer noted that the company’s recapitalization efforts in 2024 have positioned it to weather economic turbulence. Furthermore, he pointed out that certain business segments of Priority Technology exhibit countercyclical or recession-resistant characteristics, which could help support the company during economic downturns. This resilience is reflected in the company’s financial metrics, with InvestingPro showing a healthy current ratio of 1.05 and strong EBITDA of $191.5 million. InvestingPro subscribers can access 8 additional ProTips and comprehensive financial analysis through the Pro Research Report.
Despite the recent share price decline and heightened macroeconomic uncertainty, the analyst’s stance on Priority Technology remains optimistic. The firm’s decision to reiterate the Outperform rating while adjusting the price target reflects a cautious yet positive view on the company’s future performance.
The updated price target of $12.00 takes into account the current economic uncertainty, but Keefe, Bruyette & Woods continues to see value in Priority Technology’s shares. The firm’s analysis suggests that the company’s strategic actions and the inherent stability of some of its operations provide a solid foundation for future growth.
In other recent news, Priority Technology Holdings Inc. reported its fourth-quarter 2024 earnings, showing an impressive performance with earnings per share (EPS) of $0.18, significantly exceeding the forecast of $0.06. However, the company’s revenue for the quarter was $227.1 million, slightly below the expected $229.43 million. Despite the revenue miss, Priority Tech experienced a 14% year-over-year increase in revenue and a 16% rise in full-year revenue to $879.7 million. The company also reported a 15% increase in adjusted gross profit for the quarter, reflecting strong operational execution. Priority Tech anticipates a revenue growth of 10-14% for 2025, projecting total revenue between $965 million and $1 billion. Analysts have noted the company’s strong financial performance and growth prospects, although they expressed some concerns about potential challenges such as tariffs and increased competition. These recent developments highlight Priority Tech’s strategic focus on growth and profitability in the coming year.
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