Priority Technology Holdings: The Hidden Fintech Growth Story With 100%+ Upside

Solving Real Problems, Driving Growth, and Turning Debt Into Opportunity

Estimated Reading Time: 8 minutes

Before You Dive In: 60 Seconds Elevator Pitch for Priority Technology Holdings (NASDAQ: PRTH)

💡 The Problem: Businesses struggle with disconnected tools for payments, banking, and vendor management.

🧩 The Solution: A unified platform for payments, payables, and cash flow—businesses didn’t know it could exist, and now they can’t live without it.

📈 The Opportunity: PRTH isn’t flashy fintech; it’s essential. Sticky relationships, growing revenue, and untapped markets could make it indispensable.

⚠️ The Elephant in the Room: $800M in debt? Scary, yes. But proactive management and strong growth are turning this into a rare upside play.

🎯 Why I’m In: PRTH’s market positioning, growth trajectory, and ability to solve massive inefficiencies make it a high-upside fintech investment. A clear path to 100%+ upside by 2025 makes PRTH a bet worth taking.

Why Priority Technology Holdings Caught My Attention: A Fintech Solving Real Problems

When evaluating a fintech company like Priority Technology Holdings, I ask: How big is the problem they’re solving? For PRTH, the answer is massive.

Picture a restaurant on a busy Saturday night. Payments are flowing in, but cash won't hit the bank until Monday—or later if it’s a holiday. Meanwhile, suppliers demand payment by Monday morning. Multiply that across thousands of businesses, and you have a cash flow nightmare. PRTH eliminates this chaos by connecting payments, banking, and vendor management in a seamless system businesses didn’t know they needed—but now can’t live without

This chaos exists because the tools businesses rely on—payments, banking, and vendor management—don’t talk to each other. PRTH fixes this with a unified commerce platform that integrates payments, payables, and cash flow management into one seamless system. It’s the kind of problem businesses didn’t even know could be solved, and PRTH delivers it quietly and efficiently.

PRTH isn’t a flashy “payments company.” It’s the pipes that connect money, workflows, and automation for businesses. As adoption grows, integrations deepen, relationships become stickier, and growth compounds—a flywheel effect that makes PRTH indispensable to its clients.

The Elephant in the Room: Debt... and Opportunity

Yes, $PRTH carries significant debt (~$800M compared to a ~$700M market cap), largely from acquisitions to expand its services. On the surface, this might seem daunting, but this is where the opportunity lies. Management is tackling this head-on:

• Redeemed all preferred stock, saving $30M annually.

• Filed a shelf registration, likely to reduce debt and cut ~$65.8M in annual interest expenses.

With 2024E revenue growth of ~16% YoY and adjusted EBITDA growth of ~20% YoY, PRTH is scaling efficiently under CEO Tom Priore’s leadership. Back-of-the-envelope math suggests the stock could double by 2025E as debt shrinks, interest expenses decline, and profitability improves. If you think fintech is only about consumer-facing apps, PRTH’s model will surprise you.

Intriguing Enough? Let’s Dive Deeper

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Unpacking Priority Technology Holdings: The Fintech Powering Business Operations

Founded in 2005, Priority Technology Holdings has grown into the 5th largest non-bank merchant acquirer in the U.S. Unlike consumer-facing fintechs like Square or PayPal, PRTH operates behind the scenes, helping businesses manage payments, pay suppliers, and streamline finances. It’s not flashy, but it’s essential. Its unified commerce platform integrates payments, banking, and vendor management into one seamless system, serving:

1. SMBs: Tools to accept credit cards, online payments, and more, embedded into third-party apps or sold directly.

2. B2B Payables: Automates supplier payments for large-scale clients like Mastercard and Citibank.

3. Enterprise BaaS: Embeds banking and payment features into enterprise systems, modernizing outdated infrastructure.

PRTH connects small businesses and large enterprises alike, creating stickier customer relationships and recurring revenue. While often overlooked, PRTH plays a critical behind-the-scenes role as the financial plumbing businesses depend on daily.

The Market Opportunity: Unlocking Multi-Trillion Dollar Potential

PRTH operates at the intersection of three massive markets:

• Digital Payments: A $16.6T market by 2028 (9.5% CAGR), driven by e-commerce growth and the cashless shift. PRTH serves SMBs with flexible payment solutions embedded through partnerships.

• B2B Payables: A $185.1T market by 2033 (10% CAGR), transitioning from checks to digital payments. PRTH automates supplier payments for large enterprises, a market ripe for disruption.

• Enterprise Banking Solutions: Modernizing legacy systems through Banking-as-a-Service (BaaS), PRTH helps enterprises streamline operations and embed financial tools.

By consolidating payments, payables, and banking into a single cohesive platform, PRTH reduces inefficiencies, builds long-term client relationships, and is uniquely positioned to capture growth in these expanding markets.

Growth Drivers and Execution

1. Multi-Channel Distribution: Scales efficiently through resellers, sales agents, and embedded tools in third-party platforms like restaurant management software.

2. Key Partnerships: Collaborates with financial giants like Mastercard and Citibank to enhance credibility and adoption.

3. Plastiq Integration: The 2023 acquisition of Plastiq transformed a bankruptcy asset into a $6–$7M/month revenue generator, strengthening PRTH’s B2B payables position.

4. Profitability Improvements: 2024E projections show ~16% revenue growth and ~20% EBITDA growth, highlighting PRTH’s ability to scale efficiently.

   

5. B2B and Embedded Finance Expansion

   1. B2B Payables: Experiencing strong growth driven by working capital solutions and expanded sales efforts. These initiatives are not fully reflected in 2025 guidance, offering significant upside potential.

   2. Embedded Finance: Surpassing expectations with increased adoption of integrated payments and banking solutions. Incremental revenue from these offerings flows directly to the bottom line with minimal costs, enhancing profitability.

   3. Emerging Sector Opportunities: PRTH is leveraging its technology to tap into high-growth markets:

      1. Real Estate and Construction: Expanding Treasury and property management solutions.

      2. Payroll: Positioned to benefit from stricter regulatory compliance requirements for money transmission.

      3. Banking-as-a-Service (BaaS): Capitalizing on new FDIC regulations by helping banks meet granular compliance demands.

Financial Health and Turnaround Progress

Critics often cite PRTH’s ~$800M net debt compared to its ~$730M market cap as a concern. However, management is executing a proactive turnaround strategy aimed at significantly improving the company’s financial health:

1. Preferred Stock Redemption:
   PRTH recently redeemed all preferred stock, eliminating ~$30M in annual dividend obligations. This move not only improves profitability but demonstrates management’s commitment to reducing financial strain and creating long-term shareholder value.

2. Shelf Registration for Deleveraging:
   PRTH filed a shelf registration, likely to raise equity capital aimed at reducing debt. This step could cut millions in annual interest expenses (currently ~$65.8M) and accelerate progress toward healthier leverage ratios.

3. Interest Expense Reduction:
   As PRTH reduces its debt burden, shrinking interest costs will directly boost earnings. Every dollar saved on interest flows straight to the bottom line, positioning the company for EPS acceleration as early as 2025.

Valuation and Upside Potential for PRTH

Key Projections for 2025E:

• Revenue: Expected to grow 10–15% YoY, reaching ~$975M.

• Adj. EBITDA: Estimated to grow 15–20% YoY, reaching ~$230M.

• Earnings Per Share (EPS): Projected at ~$0.70/share.

• Current EV: ~$1.5B

To gauge PRTH’s potential, we compare it to fintech peers:

PRTH currently trades at lower multiples due to its debt and turnaround story but has significant re-rating potential as it grows revenue, expands EBITDA, and reduces leverage.

1. EBITDA-Based Valuation

• 2025E EBITDA: $230M.

  • At 10-15x EV/EBITDA (Peer-Aligned) ~100%+ Upside

2. Revenue-Based Valuation

• 2025E Revenue: ~$975M.

• At 3-4x EV/Sales (Peer-Aligned): ~100%+ Upside

3. P/E-Based Valuation

• 2025E Net Earnings: ~$55M net income.

• At 25x P/E (Moderate Growth Valuation) ~100%+ Upside

PRTH’s ability to grow revenue, improve margins, and reduce debt creates a clear pathway to re-rating. For long-term investors, this makes PRTH a high-upside play in the fintech space.

Competition and Risks

Competition

PRTH operates in a highly competitive fintech landscape, facing challenges from established players and specialized firms:

1. Direct Competitors:

   • Fiserv and Global Payments dominate large-scale payment processing with established client bases and significant resources.

   • Nuvei focuses on high-growth B2B and e-commerce niches, competing on innovation and flexibility.

2. Consumer-Facing Platforms:

   • Companies like Square and PayPal excel in SMB acquiring, offering user-friendly interfaces and strong brand recognition.

   • These platforms may outpace PRTH in customer acquisition for smaller merchants.

3. Banking Solutions Providers:

   • Stripe Treasury and similar offerings are entering the Banking-as-a-Service (BaaS) market, targeting large enterprises with modular, API-driven tools.

PRTH differentiates itself with its unified commerce platform, serving both SMBs and enterprises, but the fragmented market means competition is fierce.

Risks

1. Debt Burden:

   • With $800M in net debt, PRTH faces significant interest expenses ($65.8M annually), which constrain profitability.

   • Any delay in deleveraging or adverse market conditions could amplify financial strain.

2. Economic Sensitivity:

   • PRTH’s core markets, especially SMB acquiring, are sensitive to macroeconomic factors. A downturn could slow growth in payment volumes and business spending.

3. Competitive Pressure:

   • Larger players with deeper pockets could out-innovate or underprice PRTH, especially in key segments like B2B payables or SMB acquiring.

4. Dilution Risk:

   • Raising equity to reduce debt, as suggested by the shelf registration, may dilute existing shareholders and cap short-term upside.

Despite these risks, PRTH’s proactive management, strong revenue growth, and expanding EBITDA provide a solid foundation for overcoming challenges. The company’s focus on operational efficiency and debt reduction positions it well for long-term success.

Conclusion

PRTH isn’t just a fintech with a debt problem—it’s a growth story in disguise. Management is systematically addressing challenges while capturing opportunities across massive markets. With accelerating EPS growth, clear deleveraging, and sticky customer relationships, PRTH is set for a significant re-rating.

For long-term investors willing to look beyond the surface, PRTH offers 100%+ upside potential and a rare opportunity to get in before the market catches on.

My Skin in the Game

I own shares in PRTH because I believe its growth story and turnaround potential are being overlooked by the market. Like every investment, this comes with risks, but the upside is compelling enough for me to bet on PRTH’s success.

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Disclaimer

This is not financial advice. I hold positions in the stocks mentioned, which may create a conflict of interest. Please do your own research and consult a financial professional, as all investments carry risk, including potential loss of principal. I have not received any compensation from any company to write this; all opinions are solely my own.

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