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What Does Priority Technology Holdings, Inc.'s (NASDAQ:PRTH) Share Price Indicate?

While Priority Technology Holdings, Inc. (NASDAQ:PRTH) might not be the most widely known stock at the moment, it led the NASDAQCM gainers with a relatively large price hike in the past couple of weeks. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Priority Technology Holdings’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Priority Technology Holdings

Is Priority Technology Holdings Still Cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 16.55% above my intrinsic value, which means if you buy Priority Technology Holdings today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $4.68, there’s only an insignificant downside when the price falls to its real value. In addition to this, Priority Technology Holdings has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will Priority Technology Holdings generate?

earnings-and-revenue-growth
earnings-and-revenue-growth

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With revenues expected to grow by a double-digit 25% over the next couple of years, the outlook is positive for Priority Technology Holdings. If the level of expenses is able to be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? PRTH’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on PRTH, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Priority Technology Holdings, you'd also look into what risks it is currently facing. For example, Priority Technology Holdings has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about.

If you are no longer interested in Priority Technology Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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