Why Priority Technology Holdings Inc (NASDAQ: PRTH) Stock Is Going Gangbusters

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Priority Technology Holdings Inc (NASDAQ: PRTH) stock rose over 14.3% on March 17th, 2021 (Source: Google finance) after the company posted better than expected results for the fourth quarter of FY 20.

The company posted non-GAAP gross profit of $32.5 million increased 3.2% from $31.4 million. The company posted non-GAAP Gross profit margin of 30.6% decreased 144 basis points from 32.0%. The company generated income from operations of $6.2 million increased 489.3% from $1.1 million. The company posted non-GAAP Adjusted EBITDA of $18.2 million increased 12.7% from $16.2 million. Total net leverage ratio of 5.85x at December 31, 2020 decreased from 6.16x at September 30, 2020

PRTH in the fourth quarter of FY 20 has reported the adjusted loss per share of 1 cents, beating the analysts’ estimates for the adjusted loss per share of 9 cents, according to analysts polled by Capital IQ. The company had reported the adjusted revenue growth of 8.1 percent to $106.1 million in the fourth quarter of FY 20, beating the analysts’ estimates for revenue of $105.6 million.

Meanwhile, the company and Finxera Holdings, Inc., which is a pioneer in the fintech industry that launched and operated one of the first Banking as a Service (“BaaS”) platforms, has announced they have entered into a definitive agreement to merge. Finxera will operate as a wholly owned subsidiary of Priority. The transaction is expected to close in the third quarter of 2021. The Finxera acquisition is expected to accelerate Priority’s position as a market leader in the convergence of payments and banking as a service. The combined platform is planned to be equipped to take and make payments whether on card, ACH, or even blockchain and manage all aspects of payment operations like onboarding, risk, compliance, and client service for the clients.  Together bot the companies will be a one stop-shop for payments and virtual bank account management that today’s merchants and modern software companies are seeking in order to manage and monetize their payment networks. Meanwhile, Priority’s offering combines modern cloud infrastructure and operational expertise is planned to deliver unparalleled Payment Infrastructure as a Service (“PIaaS”) to organizations with complex payment operation needs, including low friction merchant boarding, underwriting, risk management, and compliance monitoring. Finxera’s BaaS technology allows for the rapid integration of banking services into business applications to establish and manage bank accounts for the collection, storage, and sending of money.

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